Capital One 2Q17 Earnings Call Notes

Richard Fairbank

Exceptional opportunity has run its course, now just a good opportunity

“we believe the opportunity to grow continues in the card business. What I would say is the exceptional opportunity has mostly run its course and now there’s a more just there is just a good opportunity let’s talk about the exceptional opportunity for a second while a lot of people were not — they weren’t as heavily marketing and not as seeing the growth opportunity that we saw, we pretty much captured several years of outsized growth and I think that it served us very well even though we all know of course the upfront costs of that in terms of credit and allowance have been little rough on the P&L. What I think has happened over time, the competition has definitely intensified but it’s not irrational. ”

Banks have to do a better job of taking the impact of disruption into account

” even before the day finally comes when we down the road we’re all doing our work in the back seat and there is no driver long before that I think we all have to be very vigilant about what is the impact of technology change is there come to be I mean generally the quality of technology has sometimes allowed cars to last longer and has been a good guy in the auto business. But the question is will there be a tipping point where the old cars just don’t cut it and the new ones are so much better. So this in fact I just want to pause for a second and just kind of seize the moment that one of the — one of the things that I don’t I think banks don’t do that well I think Capital One did not do that well on things like Uber story is pull way up across all of our lending businesses and ask what is the impact given that industry after industry is being revolutionized, what is the impact especially I think in the commercial C&I business of the revolution that’s going on in our clients’ businesses and if we just go and make one loan at a time and do our nice underwriting standards we could wake up and have a lot of rude surprises like we did in the taxi kind of business.”