Capital One announced a whopping $636.3 million profit in the first-quarter with lesser money invested towards loan losses.
A contribution of $1.40 per share has resulted in the rise in profits of this McLean based banking and credit card company. This is as against the results of last year which projected a loss of $108.1 million.
The results come as a surprise even to the analysts of Thomson Reuters who predicted a profit of 58 cents per share.
Richard D Frank, chief executive of Capital One voiced his views saying "We've demonstrated our resilience through the most challenging economic cycle we've seen in generations, and we believe that charge-offs in our consumer lending businesses likely peaked in the first quarter".
The sum set aside for loan losses by the company has seen a progressive decline from $1.85 billion in the last quarter of 2009 to $1.48 million in the first quarter of 2010, the difference being a substantial 31 percent on the whole.
As per the opinion of many experts, Capital One will only rise owing to the economic recovery after enduring the worst financial crunch that the industry could face.
"As we begin to emerge from the challenging economic environment, our strong and flexible balance sheet continues to position us well to take advantage of positive growth opportunities" commented Gary L. Perlin, the chief financial officer.
The company said that though the domestic and international credit card segments saw a decline in revenue, the relief came in terms of decreased total charge-offs from the last quarter of 2009. The improvement in sectors like auto, and retail banking contributed to the reduced losses for the company helping them earn higher charge-off rates through domestic credit cards.
In an effort to start new ventures, Capital One has adopted the strategy of acquisitions and made its presence felt in New York and Louisiana. In Washington, Capital One made its mark by buying Chevy Chase Bank which has as many as 250 branches in Washington region.
On Thursday, the company reiterated that there were no changes in the Chevy Chase Bank operations and they have seen a growth of 12.6 percent from the final quarter of 2009 in the banking segment so far.
Fairbank issued a statement telling "While legislative and regulatory uncertainty remains, we believe that we are well-positioned to ramp up our businesses as we emerge from the recession, and to deliver strong and sustainable returns over the long term".