Capital One Q1 Results Outlook: Profit Growth Fueled by Release of Provisions Amid Decrease in Revenue

Ticker: COF

Author: Stock Analyst  Date: 2021/04/23

On Tuesday, April 27, the American diversified financial holding Capital One Financial will report for the 1st quarter of 2021.

The results, according to our estimates, will be mixed. Thus, we expect the bank's quarterly revenue to decline by 4.1% y / y to $ 6.95 billion amid continuing pressure from the effects of the coronavirus pandemic on business and consumer activity in the United States and the world. In particular, net interest income could have decreased by 5.4% to $ 5.7 billion due to a decrease in the volume of loans issued, as well as a decrease in the net interest margin.

Meanwhile, against the background of improved forecasts for the global economy, we expect a sharp decline in reservation costs - to $ 720 million from $ 5.4 billion in Q1 2020. As a result, the bank's net profit could jump to $ 1.9 billion against a loss of $ 1.3 billion in the 1st quarter of 2020, with an ROE of about 14%.

Capital One Financial is an American diversified financial holding, one of the top 10 largest banks in the country in terms of assets.