Discover and Capital One, two of the nation’s biggest credit-card issuers, saw some of the largest write-offs in their lending divisions in nearly six years. Shares of Capital One fell almost 2.9 percent on the news the company’s charge-off rate to 5.02 percent, the highest rate for the company in six years. The company also reported that provisions for losses in its credit-card division rose to $1.7 billion in the first quarter of 2017, a jump of nearly 29 percent.
Discover shares fell 3.1 percent to $65.23 on news the company’s charge-off rate rose 2.84 percent, which was the biggest increase for the company since the fourth quarter of 2014. The provisions the company uses for credit card losses rose 1.4 percent to $586 billion. Discover also reported a net income loss of 2 percent to $564 million compared to last year’s first quarter results. However, the company noted that although charge-off rates rose, the rates are still at some of the lowest levels since the Great Recession.
Capital One reported a net income of $810 million for the first quarter of 2017, which is a 20 percent loss compared to this time last year. Capital One’s share price fell to $83.06 on the news, but the company said it expects a 7-11 percent growth rate in its earnings-per-share for the rest of the year. The company also stated that it expects its efficiency ratio to improve to nearly 51 percent.