Wednesday, January 16, 2019

Capital One Bank Evaluation

marge Performance Evaluation Project detonator virtuoso border capital of the United States one(a) fiscal Corporations home base is in McLean, Virginia and in the federal reliever district five, The Federal Reserve of Richmond, Virginia. It is issuance 89 in comrade assembly one with their amalgamate assets of over $300 million. Peer group one banking companys ar institutions that induce equal to or greater than $10 million in merge assets. uppercase star Bank specializes in extension cartes, home loans, cable car loans, while providing banking and savings products.They ar a Fortune 500 come with and have paved the way for mass credit card merchandising in the 1990s. Since its inception in 1988, chapiter One has acquired numerous small banks and has kept growing to become one of the most well eff bank place companies in the United States. Unfortunately in November 2008, Capital One Bank suffered devastating losses and received $3. 5 cardinal bail-out fund s from the Federal Emergency Economic Stabilization Act. But by mid 2009, Capital One Bank had bought back over 3. 5 million of their preferred stock shares from the United States Treasury.Although Capital One Bank has experienced some economic hardships in the recent past, it seems to be holding steady after the wake of the 2008 financial system meltdown. If we take a close look at this banks performance report, we potty find some interesting information about their biggest asset components. For Capital Ones assets their partage for loans to individuals is relatively game, 36. 77 per centum compared to that of the peer group sightly of 4. 98 pct. This is indicative of a company that produces a large number of loans to individuals in the form of real estate, auto, and credit cards.This as well as indicates that this bank is interested in making remuneration from interest on loans. Real estate loans for this company are high with 22. 26 percent compared to the peer group aver age of 32. 89 percent. Although this bank dabbles in commercialized banking, it keeps its commercial and industrial loans to a minimum in comparison to its separatewise peer one counterparts. There are a few areas where Capital one shows virtually no interest such as hoidenish loans, investments in mutual funds and equity securities, and fed funds change and reverse repos which are purchased under an agreement to resell.Federal funds sold are used 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 not use this practice may be because it does not want to risk losing assets in the event that the borrowing bank defaults. Because Fed Funds Contracts are not secured they are always matter to loss if the borrowing bank defaults (Olsen Research Associates). Capital One Bank has relatively average percentages of debt securities of less than or more tha n one yr.A debt warranter 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 principal amount that is returned to the lender at a specified maturity date. Moving on to the liquidity and funding of Capital One Bank, the heart and soul deposits are above those of other peer banks at 64. 84 percent compared to 55. 17 percent. Core deposits are comprised of demand deposits, deposit accounts that are put in to negotiable orders of withdrawal or automatic transfer from the savings accounts.This class 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 tenderness deposits to fund loans while offering advantages such as predictable be and a measuring rod of the degree of customer loyalty (Core Deposits). Core deposits are less vulnerable t o short-term changes in the interest rates than CDs or money market accounts (Core Deposits). The net 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. Credit card loans blow the competition out of the water with an exceedingly high 40. 9 percent compared to peer group ones average of 2. 41 percent. The liquid assets of Capital One are around lower in comparison to their peers by about 10 percentage point this is another indicator that this bank produces numerous loans and has its assets tied up.Turning the management to the relative income statement and boundary lineal compend portion of the report lead describe the key components of earnings relative to average assets, 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(prenominal) net interest income. Adjusted operating income, which is net interest income add-on non-interest income, for Capital One Bank is 7. 45 percent to the peer group average of 4. 74.This is almost twice the amount of income from interest over its competitors. aft(prenominal) accounting 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 list provisions for loan and lease losses which are monies set by for default loans. These provisions are greater than the competitors by 1. 25 percent and represent 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 long-term funding that allows a chore star sign to operate. It is the investment that the business 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 lever based on the share price and number of shares outstanding. This is generally the markets representation of the companys value (Ycharts). For Capital One Bank, there capitalization is relatively similar to its counterparts. blondness 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 represent a substantial difference. Although Capital One monetary has seen its ups and downs over the past few y ears, it reports their third quarter net income jumped 47 percent versus the prior year quarter.This change magnitude in profits is credited to the acquisition of ING Direct a financial institution of Dutch origin 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 tense holds. &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212-Top of Form decline 10, 2012 1217 p. m. ET COF (Common Stock) ExchangeNYSE (US Dollar) Last Trade $57. 77 Change + 0. 70 % Change 1. 23% Volume 1,167,465 Intraday High $57. 80 Open $56. 91 Intraday Low $56. 78 Minimum 20 bite delay Bottom of Form (Capital One Stock Quote and Chart) whole works Cited Associated Press. News SummaryCapital One Posts Higher 3Q Profit. Bloomberg byplayweek News. 18 2012 n. page. Web. 10 Dec. 2012. <http//www. businessweek. com/ap/2012-10-18/news-summary-capital-one-posts-higher-3q-profit>. Capital One Financial Corporation Market Cap. Ycharts. N. p. , 06 2012. Web. 6 Dec 2012. <http//ycharts. com/companies/COF/market_cap>. Core Deposits. Investopedia US. United States 2012. <http//www. investopedia. com/terms/c/core-deposits. asp Olsen Research Accociates, . bourn Federal Funds Sold. BANKdynamics. Olsen Research Associates, Inc. , 07 2007. Web. Web. 1 Dec. 2012. <http//blogs. olsonresearch. com/bankdynamics/2007/09/term-federal-fu. html>. Peavler, Rosemary. Business Finance. Business Finance. n. page. Web. 6 Dec. 2012. <http//bizfinance. about. com/od/glossaryoffinanceterms/g/Capitalizatio

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