Capital One Financial Corp. disclosed Friday that loan-loss ratios for credit cards improved in July from the second quarter but that delinquencies continued to rise.

Credit quality in its auto loan portfolio continued to deteriorate broadly from the second quarter.

In its monthly credit data filing with the Securities and Exchange Commission, the company said that its July net chargeoff ratio for credit card loans fell 18 basis points from June 30, to 6.08%, breaking a trend of rising losses in card portfolios that many consumer lenders had reported in the second quarter.

But the ratio of card loans delinquent for more than 30 days rose 11 basis points, to 3.96%.

Capital One was founded as a credit card lender but expanded into banking two years ago, a move that bolstered its funding sources ahead of the credit crisis.
It had said that it was preparing for rising credit card loan delinquencies and had begun to curb card lending and be more proactive in collecting outstanding balances.

Jeff Norris, the lender's head of investor relations, told a conference last week sponsored by KBW's Keefe, Bruyette & Woods, that Capital One expects credit card losses to remain "in the 6% range, where it is now, but then in [the fourth quarter] rise closer to the 7% range."

American Express Co. and JPMorgan Chase & Co., which both focus on customers with higher credit scores, have reported sharply higher losses in credit cards.

Capital One's auto loan losses rose 84 basis points, to 4.67%, and delinquencies rose71 basis points, to 8.33%.

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