Thursday, April 15, 2010

Capital One Financial (COF) March Credit Quality $COF Credit Suisse

Raising estimates. Credit Suisse raised there 2010 and 2011 EPS estimates to $2.00 and $3.75 (old: $1.75 and $3.25), respectively to reflect a lower run rate of charge offs and incremental reserve release. Our 1Q aggregate loss rate forecast is 6.36%, nearly flat with 4Q. We expect reserve levels to decline $270mn ($0.40 per share) in 1Q given the runoff in the portfolio and improvement in delinquencies. Reserve release is the largest variable in our model.

Capital One Financial
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