10-QPeriod: Q2 FY2025

CAPITAL ONE FINANCIAL CORP Quarterly Report for Q2 Ended Jun 30, 2025

Filed July 31, 2025For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

Capital One Financial Corporation reported a net loss of $4.28 billion for the second quarter of 2025, a significant shift from the net income of $597 million in the same period last year. This loss was primarily driven by a substantial increase in the provision for credit losses, largely due to the initial allowance for credit losses on loans acquired from the Discover acquisition, and higher non-interest expenses, including integration costs associated with the acquisition and continued technology investments. The company's total net revenue saw a significant increase of 31% to $12.5 billion, driven by higher average loan balances resulting from the Discover acquisition and increased net interest income. Non-interest income also grew, benefiting from expanded credit card portfolios and Global Payment Network activity. The acquisition of Discover has substantially increased the company's asset and liability base, with total assets growing by 34% to $659 billion. Capital ratios remain robust, with the Common Equity Tier 1 capital ratio at 14.0%, well above regulatory minimums.

Financial Highlights

41 data points
Beta

Revenue

$12.49B

Net Income

-$4.28B

-34.2% Net Margin

EPS (Diluted)

$-8.58

Total Assets

$658.97B

Cash & Equivalents

$61.58B

Free Cash Flow

$5.67B

Financial Statements
Beta
Revenue$12.49B
Operating Income-$2.86B
Net Income-$4.28B
EPS (Basic)$-8.58
EPS (Diluted)$-8.58
Shares Outstanding (Basic)505.60M
Shares Outstanding (Diluted)505.60M

Key Highlights

  • 1Capital One reported a net loss of $4.28 billion for Q2 2025, compared to a net income of $597 million in Q2 2024.
  • 2Total net revenue increased by 31% to $12.5 billion, primarily due to the Discover acquisition.
  • 3The provision for credit losses surged to $11.4 billion from $3.9 billion year-over-year, driven by acquired loan allowances.
  • 4Total assets grew by 34% to $659 billion, largely reflecting the assets acquired from Discover.
  • 5The Common Equity Tier 1 (CET1) capital ratio stood at a strong 14.0% as of June 30, 2025.
  • 6Capital One completed the acquisition of Discover Financial Services on May 18, 2025.
  • 7The company plans to exit the Discover Home Loan business.

Frequently Asked Questions

The net loss of $4.28 billion was primarily driven by a substantial increase in the provision for credit losses ($11.4 billion) due to the initial allowance for credit losses on non-PCD loans acquired in the Discover transaction. Higher non-interest expenses, including integration costs related to the Discover acquisition and ongoing technology investments, also contributed to the loss.

The acquisition of Discover significantly impacted Capital One's financials. It led to a substantial increase in total net revenue (up 31% to $12.5 billion), driven by higher average loan balances and net interest income. Total assets grew by 34% to $659 billion. However, it also resulted in a significant increase in the provision for credit losses and higher non-interest expenses due to integration costs.

Capital One's capital position remains strong. As of June 30, 2025, the Common Equity Tier 1 (CET1) capital ratio was 14.0%, the Tier 1 capital ratio was 15.1%, and the Total capital ratio was 17.1%. These ratios are well above the regulatory minimum requirements and the applicable well-capitalized standards.

Capital One has decided to exit the Discover Home Loan business acquired as part of the Transaction. The company is actively marketing this business and is in the process of identifying potential buyers. The goodwill generated from the transaction ($13.2 billion preliminary) has been temporarily allocated to the 'Other' category and will be reallocated to appropriate reporting units before the annual goodwill impairment test.