Capital One July charge-offs 4.83% vs. 5.79% y/y

Capital One July charge-offs 4.83% vs. 5.79% y/y

Capital One Financial (NYSE: COF) reported its July charge-offs at 4.83%, marking a significant decrease from the year-over-year (YoY) rate of 5.79%. This reduction in charge-offs indicates an improvement in the company's credit quality and risk management practices. The charge-off rate measures the percentage of loans that are not paid back, and a lower rate generally signifies better credit performance.

The company's latest financial results also showed that the total charge-offs for the quarter ending July 2025 were $2.1 billion, down from $2.7 billion in the same period last year. This decrease can be attributed to several factors, including improved customer repayment rates, enhanced risk assessment strategies, and a more robust collection process.

Capital One's charge-off reduction is a positive sign for the company's financial health, particularly as it navigates through a challenging economic environment. The company has been focusing on strengthening its risk management practices and improving customer service to mitigate the impact of rising interest rates and economic uncertainty.

In addition to the charge-off data, Capital One also reported a decline in its non-performing loans (NPLs) ratio, which measures the percentage of loans that are 90 days or more past due. The NPLs ratio decreased to 2.2% from 3.1% in the same period last year. This improvement in the NPLs ratio further underscores the company's efforts to maintain a strong credit profile.

Capital One's performance in July is a testament to its commitment to risk management and customer satisfaction. The company's ability to reduce charge-offs and improve its credit metrics is a key indicator of its financial resilience and stability.

References:
[1] https://www.marketbeat.com/instant-alerts/capital-one-financial-has-weak-outlook-for-grnt-q3-earnings-2025-08-12/
[2] https://www.cincinnati.com/story/news/2025/08/14/capital-one-425-million-class-action-lawsuit-claim-ohio/85642145007/