Capital One NIM Widens 40 bps as Auto Loans Reaccelerate

The Tip Desk · October 28, 2026 · 2 min read

Net interest income rose 4% to $12.89 billion as the margin reached 8.41% and auto average loans grew 4%.

Capital One Financial Corporation (COF) widened its net interest margin 40 basis points in the third quarter of 2026 to 8.41%, after a 14 bps expansion in the second quarter, lifting net interest income 4% to $12.89 billion from $12.37 billion.

The margin move accelerated from the prior period’s 2% net interest income growth. Average loans held for investment increased $6.7 billion, or 1%, to $457.4 billion, versus a $4.4 billion, or 1%, increase in the second quarter.

Credit Card average loans rose $2.5 billion, or 1%, to $273.7 billion, after a $223 million, or less than 1%, increase in the second quarter. Auto average loans increased $3.8 billion, or 4%, to $91.2 billion, versus a $2.9 billion, or 3%, increase in the prior quarter. Period-end loans held for investment rose $5.4 billion, or 1%, to $462.5 billion.

Average total deposits decreased $4.2 billion, or 1%, to $482.6 billion, reversing a $6.8 billion, or 1%, increase in the second quarter. The interest-bearing deposit rate paid increased 3 bps to 2.94% after a 9 bps decrease to 2.91% in the second quarter. Period-end total deposits were $480.7 billion.

The provision for credit losses decreased $73 million to $2.9 billion, with net charge-offs of $3.1 billion and a $225 million loan reserve release, versus a $1.1 billion provision decline, $3.6 billion of net charge-offs and a $662 million reserve release in the second quarter. The net charge-off rate fell 50 bps to 2.73% from 3.23%, after a 22 bps decline in the second quarter.

Total non-interest expense decreased 2% to $8.9 billion, reversing a 7% increase in the second quarter, with marketing down 4% and operating expenses down 2%. The efficiency ratio improved to 54.19% from 57.05%. Total net revenue increased 3% to $16.3 billion. Pre-provision earnings increased 10% to $7.5 billion.

Net income was $3.5 billion, or $5.61 a share, compared with $3.0 billion, or $4.73 a share, in the second quarter. Adjusted net income was $6.69 a share. Common equity Tier 1 capital under the Basel III Standardized Approach was 13.8% (preliminary and subject to change) as of September 30, 2026, up 10 bps from 13.7% at June 30. Common shares outstanding fell 2% to 601.5 million.

Founder, Chairman and Chief Executive Officer Richard D. Fairbank said the Discover integration continues to go well and that the company is making good progress on delivering expected synergies.