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Jun 30
Capital One Q2 2025 Earnings Report
Capital One reported a net loss in Q2 2025, primarily due to significant allowance build for the Discover acquisition, despite strong revenue growth.
Key Takeaways
Capital One Financial Corporation reported a net loss of $4.3 billion, or $(8.58) per diluted common share, for the second quarter of 2025. This loss was largely driven by an $8.8 billion initial allowance build for Discover non-PCD loans following the acquisition. Despite the loss, total net revenue increased by 25% to $12.5 billion, and pre-provision earnings rose by 34% to $5.5 billion, indicating strong underlying operational performance.
Capital One reported a net loss of $4.3 billion, or $(8.58) per diluted common share, in Q2 2025, a significant decline from net income in previous quarters.
The net loss was primarily attributed to an $8.8 billion initial allowance build for Discover non-PCD loans and $299 million in Discover integration expenses.
Total net revenue increased by 25% to $12.5 billion, driven by a 25% increase in net interest income and a 26% increase in non-interest income.
Period-end loans held for investment grew by 36% to $439.3 billion, largely due to the Discover acquisition, with Credit Card loans increasing by 72%.
Capital One
Capital One
Capital One Revenue by Segment
Revenue by Segment
Credit Card Revenue
CapyFin.comConsumer Banking Revenue
CapyFin.comCommercial Banking Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
The company is focused on the integration of Discover, which is progressing well, and anticipates expanding opportunities for growth and value creation as a combined entity. The significant allowance build for Discover non-PCD loans indicates a proactive approach to credit risk management post-acquisition.
Positive Outlook
- Successful completion of the Discover acquisition on May 18th, 2025.
- Integration efforts with Discover are fully mobilized and progressing well.
- Anticipated expansion of opportunities for growth and value creation as a combined company.
- Strong increase in total net revenue (25%) and pre-provision earnings (34%) in the current quarter.
- Significant growth in period-end loans held for investment, particularly in Credit Card, driven by the Discover acquisition.
Challenges Ahead
- Reported a net loss of $4.3 billion for the quarter, a substantial decline from previous periods.
- The net loss was heavily impacted by an $8.8 billion initial allowance build for Discover non-PCD loans.
- Incurred $299 million in Discover integration expenses during the quarter.
- Provision for credit losses increased significantly by $9.1 billion to $11.4 billion.
- Legal reserve activities also contributed to the negative financial impact.