Latest news with #CapitalOne
CNBC
3 hours ago
- Business
- CNBC
As Wall Street awaits the Fed's stress test results, this bank stock may come out on top
The Federal Reserve will release its annual stress test results next Friday — a high-stakes assessment that could cost or save Wall Street's largest banks billions. A solid report card from regulators could pave the way for increased share buybacks, higher dividends, more loan growth and new investments for Club holdings Wells Fargo , Goldman Sachs and Capital One . The Fed subjects U.S. banks with at least $100 billion in assets to the annual year exercise, which simulates severe economic downturns to assess how well firms can withstand financial shocks and how much additional capital each must hold to avoid insolvency. Ahead of 2025's results, Wall Street analysts are striking a hopeful tone and say regulators will lower their stress capital buffers for many of the nation's top banks. Regulators use the stress capital buffer, or SCB, to help determine how big of an emergency fund that each bank needs to keep on hand in case of a financial crisis. These requirements should come down this year because the stress test includes "less onerous scenarios" versus the prior assessment, according to analysts at Jefferies. Compared to 2024, banks will be tested in situations where there's a smaller decline in the country's gross domestic product, a smaller rise in the unemployment rate, and less aggressive declines in asset prices. Deutsche Bank analysts also expect regulators to loosen up. "Recall last year's stress test was really hard with capital requirements rising. … We could see a reversal of most or even all of that this year in our view," the firm wrote in a note this month. "We expect the stress test to be positive for the broader bank group." The stress capital buffer is just one of the components used to calculate each bank's overall Common Equity Tier 1 (CET1) ratio requirement, which is expressed as a percentage and acts as a floor that must be met. Each firm has a baseline CET1 ratio of 4.5%, a measurement of a bank's core capital — largely common stock and retained earnings — versus its risk-weighted assets like loans and other investments. On top of that, they must also hold add another minimum 2.5% for its stress capital buffer, which means every big bank must have an overall CET1 ratio of at least 7%. For the largest banks, known as Global Systemically Important Banks, like Goldman and Wells, an additional capital surcharge is applied between 1% to 4.5%. All of our banks have CET1 ratios much higher than their minimum. This means that Goldman, Wells and Capital One all have adequate amounts of high-quality capital compared to their risk-weighted assets — and, as a result, are in a position to return some of their excess capital to investors. At the end of the first quarter of 2025, Goldman Sachs' CET1 ratio was 14.8% versus the required 13.7%. Wells Fargo's was 11.1%, above its required 9.8%, while Capital One was at 13.6% versus its floor of 10%. WFC YTD mountain Wells Fargo (WFC) year-to-date performance Some Wall Street analysts expect Wells Fargo to be a standout among peers when the 2025 results are released. Deutsche Bank, for example, predicted the bank will be "a winner" from the stress tests, in large part because of what happened with the stress capital buffer component in last year's exam. In 2024, regulators required Wells Fargo to keep more capital in the emergency fund without "obvious reasons for such a large increase in our view," analysts said. Now that the stress test is seemingly easier and Wells' exposure to troubled industries like commercial real estate has improved, it may get more relief from the Fed than peers. "WFC has been working through [commercial real estate and] office exposure and the underlying earnings power of the company has improved," the analysts said. If Wells Fargo does get permission to operate with a smaller capital cushion, that will free up resources for other uses — including, perhaps, returning some of it to shareholders. Even after last year's somewhat surprising stress test results, Wells Fargo was still able to propose a 14% dividend increase. The bank can also lend more if its stress capital buffer is lower, boosting revenues for its consumer banking and lending division. More flexibility in capital can also lead to expansion in other businesses. That includes growing Wells Fargo's budding investment banking division, which we've said is a great opportunity for the bank to further diversify its revenue streams and reduce its reliance on Fed-influenced interest-based income. With less capital tied up, Wells Fargo could offer more or larger bridge loans for the mergers and acquisitions it's helping to close. The firm could also commit more of its balance sheet to bond issuances or underwriting initial public offerings as a result. GS YTD mountain Goldman Sachs (GS) year-to-date performance There's also benefits for Goldman Sachs. Jefferies said big brokers like Goldman are "built better" in 2025 and are "poised for improvement" after the Fed imposed higher capital requirements last year. The analysts cited Goldman's exposure to risk-weighted assets last year, which should "ideally keep the door open for buybacks to at least continue at recent levels and/or accelerate." Goldman authorized $40 billion share buyback program in April. Additional capital allows the firm to grow its wealth management division further to help offset a muted investment banking business. Goldman's wealth management business saw a double-digit revenue increase in fiscal year 2024. COF YTD mountain Capital One (COF) year-to-date performance Finally, there's Capital one. This is the first time the credit card issuer will be subject to the test since completing its acquisition of Discover Financial last month. Capital One now has an even bigger balance sheet following the $35 billion deal, so we're looking forward to seeing what kind of share repurchases management announces after results. "Overall, COF is well capitalized as a combined entity, and has ample flexibility to increase CET1 levels," Jefferies analysts said. In general, there are still some question marks for the future of these tests and their implications for the banking sector. The Fed proposed several changes earlier this year to stress tests requirements following pushback from Wall Street executive after 2024's more stringent rules. New changes could include averaging two year results and giving banks an extra three months to adjust to new capital buffer requirements. These are pending, however, and will not be included in this year's results. There are trade-offs between these new requirements, though, according to Columbia Business School finance professor Yiming Ma. It's a delicate balance of making sure the banks can do their job effectively and protecting the industry from another financial crisis. "If you ask the banks, they will always say the requirements are too harsh. If you ask the regulators, they say we need more requirements," Ma told CNBC Monday. "I think the truth is somewhere in between. You want hard enough requirements that help you prevent the next financial crisis, but you also don't want requirements to be too big to prevent banks from doing their day-to-day business." Regardless of the regulatory uncertainty, our bank names have had a string of good news recently. Wells Fargo had its $1.95 trillion asset cap removed earlier this month after a seven-year long regulatory punishment tied to misdeeds that predated CEO Charlie Scharf's tenure. It's a big catalyst for the financial stock, and a key reason we first started a position in Wells. Meanwhile, Goldman's crucial investment banking division looks to be improving as more companies decide to go public. On Tuesday, for example, Autodoc said that its upcoming public debut will value the online car parts retailer at nearly $3 billion. This follows other big name IPOs like Chime and eToro in recent weeks. Finally, in addition the closing of the Discover deal, Capital One's customers appear to be holding up well despite a murky economic backdrop and questions about the health of consumers. CEO Richard Fairbank said last week that the company's delinquency trends have steadily improved since the fourth quarter of 2024. (Jim Cramer's Charitable Trust is long WFC, GS, COF. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Entrepreneur
6 hours ago
- Business
- Entrepreneur
Successful Entrepreneurs Outsource These 5 Tasks — Do You?
Strategic outsourcing is a way for busy entrepreneurs to reclaim valuable time and avoid burnout, allowing them to focus on core activities that drive real business growth. Opinions expressed by Entrepreneur contributors are their own. If you're running a business in 2025, you're probably juggling more than ever with marketing, operations, customer service, finances and maybe even a rental property on the side. And while hustle culture once glamorized this all-in approach, the truth is clearer now: Doing everything yourself isn't sustainable, but rather a growth killer. A 2022 survey by Capital One found that 42% of small business owners had felt burned out in just the past month, and that's no surprise, as juggling too many roles was one of the biggest reasons why. These days, time, above money, is the most valuable asset an entrepreneur has. Smart outsourcing helps you reclaim your focus and protect your energy for the work that truly moves your business forward. The key is knowing what to delegate and when. Here are five strategic areas where handing things off can free up your time and support real growth. Related: Your Time is Money, Start Saving It By Outsourcing Task #1: Property management for passive income properties Entrepreneurs love the idea of passive income, but rental properties rarely live up to that promise when you're managing them yourself. Between screening tenants, handling 3 a.m. plumbing calls, tracking down late rent and coordinating repairs, what seemed like a smart side investment can quickly turn into a second full-time job. Even if you own just one or two units, the distractions add up. The good news? You don't have to do it all. Delegating tenant screening, rent collection, maintenance coordination, and compliance paperwork can restore that "passive" quality you were aiming for in the first place. However, not all property managers are created equal. These questions to ask a property management company will help ensure you hire someone who protects your time and your assets. A good manager brings local expertise, vetted contractor networks and a system for handling issues before they become expensive. You're not just paying for convenience, you're investing in stability and peace of mind. Task #2: Bookkeeping and financial reporting It's easy to put off bookkeeping. Many founders tell themselves they'll get to it next week, then next month, and before they know it, they're sorting through a pile of receipts under pressure. The problem isn't just about missing paperwork. When your finances are out of date, every decision becomes harder. Clean books make your business easier to run. Unorganized ones quietly hold everything back. You don't need a full-time CFO. A lightweight setup using Quickbooks or Xero, paired with a part-time bookkeeper or outsourced accountant, can make a big difference. They'll help you stay ahead of taxes, track profitability and keep your margins from slipping. If you're planning to raise funding or bring on a partner, clean books are non-negotiable. Task #3: Customer support You can't grow a business if you're glued to your inbox. Still, one support email turns into five, and suddenly, your morning is gone. Customer support is one of the first things you should consider handing off. Whether it's outsourced chat support, a virtual assistant or a call service, plenty of options can scale with you. What matters most is that whoever handles it understands your business. Customers don't need perfection, but they do need to feel like someone's listening. Companies that take customer experience seriously tend to see real results. One study found that businesses focused on customer service grew revenue 41% faster than those that weren't. Related: What Not to Do When Outsourcing Task #4: Content creation and marketing Writing your own content can seem manageable until a quick blog post turns into hours of edits and second-guessing. Most entrepreneurs don't have the time or headspace to do content well. Writing blog posts, SEO copy, newsletters and LinkedIn updates is one of the easiest things to outsource once you know what you need. That said, handing it off blindly doesn't work. Before bringing someone on, get clear on your voice, your audience and your goals. Once you're aligned, hire someone who gets it. Even a few good pieces of content each month can go a long way in keeping your business visible and credible. Task #5: Admin and scheduling Founders spend more time on admin than they realize. These small tasks don't just eat up time; they interrupt focus. Virtual assistant (VA) support is one of the most straightforward ways to reclaim that time. Whether it's managing your inbox or rebooking travel, a reliable assistant can quietly remove hours from your week. VA services are more flexible than ever. Some founders prefer U.S.-based assistants for time zone alignment; others choose offshore teams for affordability. There's no right answer, just what fits your workflow. Start with a clear handoff. Delegate recurring tasks like scheduling, inbox triage and travel logistics. How to outsource the right way: 3 rules to follow Outsourcing only works when it's done with intention. Before you delegate anything, it's worth thinking through what should stay in-house, and what really needs to go. This guide can help weigh those decisions based on your goals, team size and growth stage. Vet like you're hiring: Treat each potential partner like a new hire. Skill matters, but so does attitude and communication style. Treat each potential partner like a new hire. Skill matters, but so does attitude and communication style. Be clear on expectations: Define scope, timelines and deliverables. Ambiguity creates tension; structure builds trust. Define scope, timelines and deliverables. Ambiguity creates tension; structure builds trust. Keep the vision: Delegate the how, but keep the why. Your vision sets your business apart. Related: 7 Ways to Make Outsourcing a Success Time After Time Buy back your time The most successful entrepreneurs don't just manage their time, they protect it. Outsourcing lets you focus on what only you can do: product, vision, leadership. Everything else? Simply hand it off.
Bloomberg
a day ago
- Entertainment
- Bloomberg
What to Know About Capital One's Lounge at JFK, a Play For Premium Travelers
One Tuesday night at JFK, as the sun was setting over a clutch of airplanes on the tarmac outside Terminal 4, Leon Thomas adjusted his guitar and stepped up to a microphone. Thomas is a singer songwriter from Brooklyn who blends hip-hop with R&B, and whose single, Mutt, has been making the rounds on TikTok (and is a No. 1 on the R&B chart). He looked like he wasn't sure what he was doing in this setting. 'This is the first time I've played an airport,' he said with a laugh. Thomas was there to inaugurate Capital One's sleek new flagship lounge, which will be the company's first at a New York City airport when it opens to the public on June 19. Capital One is not quite as new to the airport lounge scene as Thomas is, but in recent years the company has made a significant effort at expansion.
Yahoo
3 days ago
- Business
- Yahoo
Capital One Financial Corporation (COF): Stock 'Is Breaking Out,' Says Jim Cramer
We recently published a list of . In this article, we are going to take a look at where Capital One Financial Corporation (NYSE:COF) stands against other stocks that Jim Cramer discusses. Capital One Financial Corporation (NYSE:COF) is an American regional bank that has been in the news this year due to its acquisition of digital bank and financial technology firm, Discover. The stock is up by 7.9% year-to-date after recovering from a 17% Liberation Day drop as investors fretted about the future state of the US economy. However, Capital One Financial Corporation (NYSE:COF)'s shares have dipped by 2% over the past month amidst broader market concerns. Here are Cramer's latest comments about Capital One Financial Corporation (NYSE:COF): 'But let's go the other way. Capital One which is the largest issuer of credit cards for people who are questionable credit. Although not with Richard Fairbank, cause he's a lot smarter than we are. I mean that stock is breaking out here. That's after the merger with Discover Financial. I still think they can [inaudible] up with a credit card that does not charge, the restaurant does not put a 3% charge on.' A smiling face of a customer as they make a deposit at this company's branch. Cramer has discussed Capital One Financial Corporation (NYSE:COF)'s Discover merger in quite a bit of detail. Here are his recent thoughts: 'I'll give you a regional [bank] that I love David, let's see if you can guess it. . . .How's that stock [COF] doing? While we acknowledge the potential of COF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
USA Today
3 days ago
- Automotive
- USA Today
Is a 20-year-old car too old to buy? Why age isn't as important as you might think
Is a 20-year-old car too old to buy? Why age isn't as important as you might think Is age just a number when it comes to used cars? Show Caption Hide Caption Buying, selling a car online tips and tricks to know Here are some easy ways to determine how much your car is worth. Problem Solved Vehicle degradation depends on mileage more than age. One study proved that several vehicles can last for 250K miles. Drivers can estimate their vehicle's lifespan by dividing the total miles before major repairs by annual driving range. Buying older used car models can save drivers big bucks. The question is, how old is too old for a used vehicle? Is there a definitive age cutoff when it comes to buying a reliable used car model? There are several factors that should be considered when searching for an older used model. Surprisingly, age isn't as important as mileage, make/model, and overall reliability when it comes to a car's lifespan. Are 20-year-old used cars too old to buy? Age can play a role in vehicle lifespan, but it isn't always the best metric to gauge the potential longevity of a vehicle. In fact, some older well-maintained vehicles could be nearly as reliable as newer model years based on design. A 20-year-old car that has traveled for the average annual miles driven per year (14,489 miles according to Kelley Blue Book) is likely well past its prime. On the other hand, vehicles that have accumulated less miles per year than the annual average and are well-maintained could still last for years before major mechanical issues. Debilitating rust or major mechanical failures are cited as signs a vehicle is "too old to drive", according to a piece regarding vehicle age by Capital One. That said, there isn't a specific vehicle age where any car becomes so antiquated that it's rendered useless. Mileage: A true indicator of vehicle age and degradation Age may not be the best indicator of where a vehicle currently is in its lifespan, but mileage (on original parts) can help car buyers understand how many miles and years a vehicle has left on average. A study by an automotive research site, compiled a list of the 30 vehicles most likely to last for up to 250,000 miles. The study analyzed odometer reading data for over 402 million vehicles. The average vehicle only has an 8.6% chance of reaching 250,000 miles or higher, according to iSeeCars. Thus, 250K miles is a fair mileage number to set as the end of a vehicle's lifespan (optimistically). Realistically, most vehicles will only last up to 200,000 miles (or less) before encountering major mechanical issues. Several Toyota models topped iSeeCars' list of vehicles most likely to reach 250,000 miles or more. Vehicles like the Toyota Tundra pickup truck and Toyota Sequoia SUV have over a 36% chance of reaching the mileage milestone, which is a much higher percentage than that of the average vehicle (8.6%). Models like the Toyota 4Runner SUV and Toyota Tacoma pickup truck have over a 26% chance of reaching 250K miles or more. Vehicle age has no correlation with mileage because the annual miles a driver accumulates can vary. The average lifespan of a car based on mileage Assuming that a car is driven for Kelley Blue Book's estimate of an average 14,489 miles a year and the average vehicle lasts for around 200,000 miles before major mechanical issues, a conservative estimate for a car's lifespan is 13-14 years. You can get a more specific estimate for your vehicle by dividing 200,000 total miles by your average annual mileage. Vehicles with above-average reliability such as the Toyota models that topped iSeeCars' list can have an above-average lifespan. The numbers used to calculate a car's lifespan are based on miles driven, not years owned. So, a 20-year-old car that has accumulated under 200,000 miles could last for years, depending on its mileage and reliability. Based on the iSeeCars study, at least six different vehicles have over a 25% chance of reaching 250K miles or more, increasing their lifespan estimates significantly. The five vehicles most likely to last for 250,000 miles according to iSeeCars Toyota Sequoia Toyota Tundra Toyota 4Runner Toyota Tacoma Toyota Highlander Hybrid No car is too old to buy, but a car's mileage can be too high to be reliable without significant repair costs. Parts such as engines and transmissions experience extreme wear and tear as cars accumulate 200K miles. Luckily for drivers, some cars (like Toyota models) age better than others in terms of degradation. If a car has racked up so many miles that it needs a new engine or transmission, it may not be worth buying due to the cost of parts and repairs.
