Capital One Q1 2021 net income of $3.3bn compares with a net loss of $1.3bn in the year ago quarter. Highlights include a drop in provision for credit losses by $1.1bn to $823m. Successful cost control results in a 11% fall in marketing expenses. Meantime, Capital One Q1 2021 operating expenses fall by 6%.

On the other hand, total net revenue falls by 3% percent to $7.1bn. But this is ahead of analyst forecasts of total revenue estimates of $6.99bn.

Margin pressure results in a 6-basis point drop in the net interest margin to 5.99%. Again, the bank outperforms analyst estimates by this metric.

The Capital One cost-income ratio rises to 52.58% from 51.44% in the year ago quarter. Credit card period-end loans decrease $7.8bn, or 7% to $99.1bn.

Capital One Q1 2021 card metrics

The pandemic is impacting Capital One card metrics. For example, the US credit card net charge-off rate rises from 2.54% to 4.68%.

The corresponding international credit card net charge-off rate rises from 2.30% to 4.65%. The 30-day delinquency rates also rise year-on-year.

The US rate rises from 2.24% to 3.69%. The international rate rises from 2.51% to 3.66%.

Period-end total deposits increase 2% to $310.3bn. Average deposits increase just under 1% to $305.1bn. Auto period-end loans increase by 2% y-o-y to $67.1bn. But commercial banking period-end loans fall by 3% to $73.8bn. The Capital One common equity tier 1 capital ratio of 14.6% compares with 12.0% a year ago.

“Strikingly strong credit drove another quarter of record earnings per share. Our investments to transform our technology and how we work are paying off,” says Richard Fairbank, Founder, Chairman and CEO. “Our modern technology is powering our response to the pandemic. And puts us in a strong position for opportunities that emerge as sweeping digital change transforms banking.”