On the Call: Capital One CEO cites factors that could drive down revenue
By APThursday, July 22, 2010
On the Call: Capital One CEO Richard Fairbanks
Capital One posted a strong second-quarter profit Thursday as it set aside less money to cover bad loans. But the outlook for the rest of the year isn’t all rosy.
During a conference call with analysts to discuss Capital One’s second-quarter report, CEO Richard Fairbanks said several factors could drive down revenue over the next few quarters. Here were his reasons:
—The credit card industry is adjusting to new regulations limiting penalty fees and the ability to hike interest rates at will.
—Charge-offs are improving, but remain elevated.
—The company may step up marketing efforts.
—Consumers are paying down debt and spending and borrowing more modestly. “The biggest negative is demand itself,” Fairbanks said.
(This version CORRECTS to identify speaker on conference call as CEO Fairbanks)
