@Anonymous wrote:
Yesterday's results for Cap One
- Second-quarter EPS of $1.87, increasing from $1.79 in Q1
- EPS beats consensus estimate of $1.72
- Net revenue up 2% sequentially and 14% year-over-year, to $5.638 billion
- Net interest margin widens by 12 basis points from Q1
- Provision for credit losses down $123 million from Q1
So stock-holders probably aren't too concerned. Doesn't mean that they couldn't do better, but things like labor costs can be low with unempowered employees, and again my guess is just a tiny fraction contacts the EO, which is expensive.
Losing customers is expensive, but they don't have huge sign up bonuses, and do have a very large credit card base to absorb such costs.
Sign up bonus, or no sign up bonus, it is still called Churn/Customer Attrition. It doesnt matter what the business is, how big or small it is, or really what the business is in the business of selling. Churn destroys the bottom line. You can hide it for awhile if you are big enough, but eventually the stockholders do become impatient with so-so results when they keep hearing about all the "good news" and are expecting returns to get better and better with each quarter. The real problem here is that it is far better cost control wise to keep a long term established customer ( such as myself ) than it is too pay Alex Baldwin and a bunch of stage actors to dress as Vikings, or bombard millions and millions of mailboxes with solicitations to find new customers to replace people like me that take their business elsewhere. Conservatively you can figure around $300 as the cost of aquiring a new customer, and lets say 3,000 old ones get fed up and leave. I`m willing to bet both of those numbers are very conservative and on the low side, but still that is $900,000 a month-- each month -- every month that is unproductive and walking out the door. In addition to that, the established customer is most likely to be one that isnt going to default. Everytime you take on new customers, the risk % is higher of the amount of them that will default. At least $1 million a month in negative churn costs and a higher percentage of risks because the growth is coming from new accounts. Makes you just want to run out there and buy up all of the Capital One stock you can afford doesnt it?
Personally, my opinion on those numbers are an indication of an improving economy despite obstruction from both parties in Washington wanting to control it for their own gains and political agendas. You have people like me who took some hits in the economic meltdown, had our credit trashed, and have begun to rebuild our credit and are more apt to pay our bills thus reducing Capital One`s loss exposures. Now we are entering a stage where customers ( like myself ) are begining to question why we are still stuck at the same $300, $500, $700, or $1250 initial opening lines plus the one & only "credit step" C-1 gives. We dont expect a Prime 0.9% no fee loaded with perks Venture card and a 10K limit, but we at least would like to see the CLI`s reflect our actual credit worthiness so when we apply for credit somewhere else that potentional creditor doesnt look at our credit file and question should they give us a line because C-1 apparently doesnt think we are too trustworthy beyond the mere toy card limits they want to keep people at.
Everyone has their reasoning for justifying taking their case to the EO because C-1 wont give them what they want through normal channels. Me personally, I think I`ll pass because to me that really isnt any different than the person who calls a restaraunt and complains about something until they get their next meal comped because they really wanted to eat there, but not pay for it
EQ- 647, EX- 641, TU- 644
Sept `13 - ZERO Debt, 100% Liquid, AND a climbing credit score. Eat your heart out Dave Ramsey!
