Capital One Bank Evaluation

hope Performance Evaluation Project majuscule cardinal and only(a)ness buzzword working capital of the United States unrivalled Financial Corporations headquarters is in McLean, Virginia and in the provideeral constraint district five, The Federal Reserve of Richmond, Virginia. It is chassis 89 in coadjutor assort one with their consolidated assets of oer $300 cardinal. Peer group one sticks atomic chassis 18 institutions that present impact to or greater than $10 million in consolidated assets. nifty unrivalled depository financial institution specializes in credit cards, home loans, auto loans, eyepatch providing swaning and nest egg products.They are a Fortune 500 company and have paved the way for mass credit card marketing in the 1990s. Since its inception in 1988, smashing One has acquired numerous smaller banks and has unploughed growing to become one of the most well know bank holding companies in the United States. Unfortunately in November 2008, C apital One Bank suffered devastating waiveres and received $3. 5 billion bail-out coin from the Federal Emergency Economic Stabilization Act. But by middle 2009, Capital One Bank had bought back everyplace 3. 5 million of their preferred stock shares from the United States Treasury.Although Capital One Bank has experient some economic hardships in the recent past, it seems to be holding regular after the wake of the 2008 financial system meltdown. If we take a blotto look at this banks performance report, we drop invent some sakeing information about their biggest asset components. For Capital Ones assets their shareage for loans to individuals is comparatively high gear, 36. 77 part compared to that of the match group honest of 4. 98 pct. This is indicative of a company that produces a giant number of loans to individuals in the form of real estate, auto, and credit cards.This similarly indicates that this bank is interested in making profits from interest on loans . existing estate loans for this company are high with 22. 26 percent compared to the peer group mean(a) of 32. 89 percent. Although this bank dabbles in commercial banking, it keeps its commercial and industrial loans to a minimum in comparison to its other peer one counterparts. There are a few areas where Capital one shows virtually no interest such as agricultural loans, investments in mutual inventorys and equity securities, and fed funds sold and run off repos which are purchased under an agreement to resell.Federal funds sold are use for overnight funds that keep balances on deposits at Federal Reserve Banks for purposes of clearing daily checks and deposits(Olsen Research Associates). A reason Capital One Bank does non use this practice may be because it does not want to risk losing assets in the event that the borrowing bank omissions. Because Fed Funds Contracts are not secured they are always subject to loss if the borrowing bank defaults (Olsen Research Associates) . Capital One Bank has sex actly average percentages of debt securities of less(prenominal) than or more than one year.A debt security can be bought or sold between two parties, has defined amounts, rates, and maturities. As a whole, debt securities are relatively safer than equity securities because they have a headspring amount that is returned to the lender at a specified maturity date. move on to the liquidity and funding of Capital One Bank, the core deposits are above those of other peer banks at 64. 84 percent compared to 55. 17 percent. consequence deposits are comprised of study deposits, deposit accounts that are subject to transferrable orders of withdrawal or automatic transfer from the savings accounts.This section also includes time deposits of less than $100,000, money market deposit accounts, other savings accounts, and other non-interest bearing deposit balances. Banks count on core deposits to fund loans while offering advantages such as predictable costs and a measurement of the degree of customer loyalty (Core Deposits). Core deposits are less vulnerable to short-term changes in the interest rates than CDs or money market accounts (Core Deposits). The remuneration loans and leases percentages of Capital One Bank are high as well compared to their competing banks.This is due to the high number of loans this bank awards to individuals in the form of mortgages, car loans, personal loans, and credit cards. acknowledgement card loans blow the competition out of the water with an extremely high 40. 9 percent compared to peer group ones average of 2. 41 percent. The liquid assets of Capital One are slightly reject in comparison to their peers by about 10 percentage percentage point this is another indicator that this bank produces numerous loans and has its assets tied up.Turning the attention to the relative income statement and marginal digest portion of the report will find out the key components of earnings relative to average asse ts, margin analysis ratios, the yields or returns of specific assets, and the cost of funds. The report shows that Capital Ones main source of income is interest income including high interest income equaling a higher net interest income. Adjusted operating income, which is net interest income plus non-interest income, for Capital One Bank is 7. 45 percent to the peer group average of 4. 74.This is almost in two ways the amount of income from interest over its competitors. After news report for operating expenses and realized gains and losses, the company has a pretax net income of 1. 82 percent and a net operating income of 1. 38 percent. The companys interest expenses are insignificantly higher than those of its peers. Capital One has made alimentation for loan and lease losses which are monies set aside for default loans. These provisions are greater than the competitors by 1. 25 percent and acquaint the banks desire to survive if loans default.Looking at the margin analysis portion of this section, you can note that the net interest income to average earning assets is twice as high as its competitors in peer group one at 6. 49 percent. It is safe to say that Capital One Bank receives the majority of its income from interest. Capitalization is the semipermanent funding that allows a occupation tight to operate. It is the investment that the seam owner and any other investors make in the firm. It is a financial term which refers to the sum of the stockholders equity of the firm and the firms long-term debt, such as bonds or mortgages (Peavler).Capitalization is also a measurement of business value based on the share outlay and number of shares outstanding. This is in general the markets representation of the companys value (Ycharts). For Capital One Bank, there capitalization is relatively similar to its counterparts. Equity capital to total asset ratio for Capital one is 13. 13 percent while the average for peer group one is 11. 30 and does not re present a substantial difference. Although Capital One Financial has seen its ups and downs over the past few years, it reports their third quarter net income jumped 47 percent versus the prior year quarter.This increase in profits is impute to the acquisition of ING Direct a financial institution of Dutch offset offering banking, insurance, and asset management services, and HSBCs United States card business (Associated Press). Net income increased $357 million from this time last year and price per share went from $1. 77 to $2. 01, a 24 cent increase (Associated Press). Revenues also soared 39 percent to $5. 78 billion. Capital One Financial reports that it expects consumer demand to slow down soon, but they are prepared for what the future holds. -Top of FormDec 10, 2012 1217 p. m. ET COF (Common Stock) ExchangeNYSE (US Dollar) Last Trade $57. 77 variety show + 0. 70 % Change 1. 23% Volume 1,167,465 Intraday High $57. 80 abrupt $56. 91 Intraday Low $56. 78 Minimum 20 m inute hinder Bottom of Form (Capital One Stock Quote and Chart) Works Cited Associated Press. newsworthiness SummaryCapital One Posts Higher 3Q Profit. Bloomberg Businessweek News. 18 2012 n. page. Web. 10 Dec. 2012. . Capital One Financial Corporation Market Cap. Ycharts. N. p. , 06 2012. Web. 6 Dec 2012. . Core Deposits. Investopedia US. United States 2012.