Cap One Falls to New Low
Capital One's stock fell to a 4 1/2 year low on Wednesday, down 9.23 or nearly 16 percent, this a day after the company boosted its forecast for bad loans in 2008. Shares closed at $50.21.
Here's the Reuters story from Tuesday:
NEW YORK, Nov 6 (Reuters) - Capital One Financial Corp, which shut down its GreenPoint Mortgage Inc unit this year, on Tuesday boosted its forecast for credit losses in 2008, citing rising credit card delinquencies and a deteriorating U.S. housing market.
The company, which is also the largest independent U.S. credit card issuer, now expects charge-offs of $4.9 billion to the mid-$5 billion range. It had on Oct. 18 projected $4.9 billion.
"We didn't quantify the uncertainty associated with our elevated delinquencies and we didn't quantify the potential if the housing market were to continue to degrade," Chief Risk Officer Peter Schnall said in an investor presentation. A transcript was filed with securities regulators.
Capital One is based in McLean. Within the last two years, it paid about $18 billion for two large banks, North Fork Bancorp Inc of Melville, New York and Hibernia Corp of New Orleans. GreenPoint was part of North Fork.
Analysts expect many large banking companies to suffer increased credit losses, or add to loss reserves, as the housing slump deepens, and consumers and businesses have greater difficulty paying their bills.
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