UPDATE 2-Capital One profit misses as net interest income falls

Thu Jan 16, 2014 6:06pm EST

* Fourth-quarter earnings $1.45/share vs est. $1.55

* Revenue falls 1.4 pct to $5.54 bln

* Revenue from credit card business falls 10 pct

* Shares down about 3 pct after the bell (Adds details, analyst comment)

Jan 16 (Reuters) - Capital One Financial Corp, one of the largest U.S. credit card issuers, reported lower-than-expected quarterly results as net interest income fell in both its credit card and consumer banking businesses.

The company's shares fell about 3 percent in trading after the bell.

Capital One's credit card and consumer loans held for investment fell in the fourth quarter ended Dec. 31, dragging down overall revenue by 1.4 percent to $5.54 billion.

Total net revenue from the bank's credit segment fell 10 percent to $3.40 billion.

However, rival American Express Co's quarterly profit more than doubled as customers spent more in the holiday season in the United States, its core market.

"AmEx is really exposed to the affluent transaction-oriented customers," KBW analyst Sanjay Sakhrani said. "Capital One is focused on the lending side and what we are seeing in the world of lending is consumers continue to be conservative resulting in weaker loan growth."

Capital One has spent much of the past decade transforming itself from a specialty credit card issuer, dependent on bond market funding, into one of the top 10 U.S. banks by deposits, with more than a thousand branches nationwide.

The company's net income rose to $859 million, or $1.45 per share, in the fourth quarter from $843 million, or $1.41 per share, a year earlier.

Analysts on an average had expected earnings of $1.55 per share on revenue of $5.47 billion, according to Thomson Reuters I/B/E/S.

McLean, Virginia-based Capital One's net charge-off rate, the percentage of loans written off as unrecoverable, was 2.01 percent, a decrease of 25 basis points from the year-earlier quarter.

Capital One shares closed at $76.44 on Thursday on the New York Stock Exchange. (Reporting by Avik Das in Bangalore; Editing by Joyjeet Das)

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