Capital One Financial Corp at Morgan Stanley US Financials, Payments & CRE Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>So Jeff, kicking off with the the big topic on everyone's mind here four months ago, Capital One announced what you call it a game changing deal to acquire Discover. You've laid out expectations out there for synergies, 15% EPS accretion. You have a compelling opportunity to scale your own network. Can you just talk a little bit about how this deal further drives the evolution of Capital One over the long run?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : I tried to copy your method, I think.

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : Just digging into the network here. But more on, you've talked about how you're going to need to invest a little bit more of your own dollars into addressing some of the issues there on their international acceptance perception of acceptance in the US, even though they're pretty much at parity in the US. Can you talk about your plans there, too, bringing the Discover brand more upmarket and how to think about the investment required to do that at this point?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And that debit part will be by '27 or maybe depending on the actual deal time closing. And then is the goal to maybe get the credit most of the credit over time or like?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : Okay. That's clear. So you've been also clear about the pro-competitive, pro-consumer aspects of the deal. Nam, as everyone here knows, I think you have a meeting with the regulators in a month public meeting, give us a quick update of where you are in the process, how that dialogue with the regulators is going on and maybe touch on any learnings you've had since deal announcement about four months ago.

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : Okay. And if we could maybe pivot to the recent news that hit the other week, Walmart a few weeks ago you both announced and enter your car partnership. You're retaining the [8.5 billion] loan book planning to convert those or at least a bunch of those cardholders over to your proprietary offerings on the strike me as a bit of an unusual outcome, typically, the retailer wants to hang on to that book. But nonetheless, it does look like a more positive outcome for you. Can you just walk us through the decision to retain that and what you're thinking on the go-forward strategy from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 6:30PM, COF.N - Capital One Financial Corp at Morgan Stanley US Financials, Payments & CRE Conference

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And if we think about the US consumer at this point, you've talked about the consumer being in reasonably, reasonably good shape versus historical standards. At the same time know, we have seen some evidence out there slowing spend as consumers maybe trade down and are still dealing with the last several years of inflation. So what are you seeing maybe you could touch on both spending trends and some of the credit trends you're seeing today?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And as you think about the consumer being rational here, you've also talked about credit stabilizing modestly above 2018, 2019 levels. But last quarter you did call out lower tax refunds as potentially adding a little bit of a near term pressure point there. How is that playing out at this point now that we've had the tax refunds kind of more fully come through at this point and any sort of updated view?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : Okay. And as you think about the competition for credit at this point, you know, everyone is still broadly in that tightening mode, but we all know the capital unlike zig when others zag on what are you seeing from the competition today and how are you reacting to that?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And I think you just mentioned a more moderate competitive environment, other areas, what other areas might those be at this point?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And what about auto we've heard a few others highlight some increased willingness to lean in there what are you seeing there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 11, 2024 / 6:30PM, COF.N - Capital One Financial Corp at Morgan Stanley US Financials, Payments & CRE Conference

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And as we maybe think about technology, you're well known to your game when you call the original fintech. I think again from a year ago, Rich was here talking about the AI opportunity, what he described as without breathtaking advances at the point at that point in time. So can you talk about how AI fits within your tech stack, how that evolution is going at Capital One today and where you've been able to take advantage of this tech so far where you see that going?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And just one on capital. So how can you talk about how you're thinking about capital return from here. I understand you have some deal related blackout periods and a near term dividend cap. But are you waiting for a little more clarity on capital rules or the pending deal for you think about any kind of meaningful increase in buybacks at this point?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And then just real quick on sea car, we have the results coming up in a few weeks on to us the variables this year, the test looks pretty similar to last year, any sort of nuances for Capital One to be aware?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : Got it. And just one last one on maybe wrapping up here in the late fee rule now probably your favorite topic of discussion but --

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : And you've got some offsets out there already, but it sounds like you're holding on holding off on most of them at this point until the rule is actually implemented. Maybe just speak to any opportunity. I mean, any examples you've actually taken so far of actions you've taken so far what the response rate from consumers has been like so far on that?

Question: Jeffrey David Adelson - Morgan Stanley - Analyst : Great. Well, Jeff I think that's all the time we have for today. So thank you for coming, and please join me in thanking Jeff.