April 27 (Reuters) - Consumer lender Capital One
Financial Corp's first-quarter profit missed estimates
on Thursday due to an increase in provisions that reduced gains
from interest rate hikes.
The Federal Reserve's rate hikes to tame soaring inflation
since the past year benefited lenders as they charged higher
interest from borrowers.
Capital One's net interest income rose 12% to $7.19 billion
in the first quarter.
Still the rate hikes left the economy reeling from higher
costs of borrowing and saw banks stockpile rainy day funds to
prepare for soured loans.
The Virginia-based lender said provision for credit losses
swelled to $2.8 billion in the quarter ended March, up from $677
million a year ago.
Capital One shares are up 3.6% so far this year but fell
4.9% to $91.3 in extended trading on Thursday.
Net profit more than halved to $960 million, or $2.31 a
share, for the first quarter, from $2.40 billion or $5.62 a
share, a year go.
Analysts on average had estimated a profit of $3.92 per
share, according to data from Refinitiv.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Maju
Samuel)
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