So seeing the good metrics and seeing the marketplace, we’re certainly on the lookout for opportunities, but I’m not here to predict an acceleration, but we certainly do like the performance of both our front book and our back book at this point.
Donald Fandetti: Thanks.
A – Jeff Norris: Next question please.
Operator: Our next question comes from Sanjay Sakhrani with KBW. Your line is open.
Sanjay Sakhrani: Thanks. First question just on the adjusted operating efficiency rate. You’ve seen some nice improvements over the last two quarters. And I know, Rich, you talked about sort of the year outlook. I’m just wondering, if we could see this type of level or trends sustain itself into next year?
Richard Fairbank: Sanjay, we’re not going to be giving out guidance on — at this point on where operating efficiency goes. We certainly are pleased with the progress that we’ve made over time in operating efficiency ratio even as we’ve continued to really invest in the business and we’re starting to see — we have these two competing things going on inside Capital One, both a real investment in technology and also at the same time, generating a bunch of benefits and efficiencies from that technology. So the net result of these two things has been — we’ve been able to really make tremendous strides forward in technology and also get some efficiencies along the way. I wouldn’t put too much reliance on any one quarter, you know these numbers kind of bounce around.
But certainly, you probably noticed that in our guidance, we had guidance of flat to modestly down with respect to our efficiency ratio for full year 2023, and we took the flat part out, and we’re now just at modestly down. So we continue to believe, over the long term that our technology transformation offers a lot of promise for operating efficiencies and delivering operating efficiency is an important part of, I think, the value creation equation for investors. I do want to say, though, at the same time, we continue to really see great opportunities in the business. We continue to still invest in technology to capitalize on even greater opportunities over time. And that’s the story of our operating efficiency ratio.
Sanjay Sakhrani: Perfect. Then I have a follow-up question just on the leaning into growth in card. Where exactly is that happening? I mean, obviously, you talked about adjusting the risk parameters, and that’s obviously flowing through in the credit numbers improving. Is it more on the transactor side that you’re leading into growth or is it balanced across all segments? I’m just curious sort of the implications on a go-forward basis? Thank you.
Richard Fairbank: Yeah. Thank you. So we are finding traction across the spectrum really. So — and we’re leaning in across the spectrum. One thing I do want to say about growth, the outstandings growth if we really think about just the strength of loan growth — for a while, the striking loan growth for Capital One and the industry was — we all said, well, this is just reversing the pullbacks from the pandemic. But I think for us and for a lot of players in the industry, these loan numbers have blown past prior levels. And let’s just reflect a little bit on what has sustained this. My view is, well, there’s the Capital One effect. We continue to have significant new account growth, and that obviously powers a lot of overtime loan growth.
Payment rates are coming down. Interestingly, they have come down quite a bit. But as a general statement, they’re not down to where they were before. Part of that mix effect at Capital One because we’ve had a lot of traction on the spending side. But even within segments, if I were to generalize, payment rates, the payment rates are still higher than they were pre-pandemic. So again, inside that, there’s partly a Capital One effect, but I think also sort of a strength of the consumer effect. However, the payment rates have come down and that somewhat and that has powered growth. And I think likely no one’s going to be able to prove this, but I think there are inflation effects underneath the surface. When things cost more as long as consumer incomes stay up to where inflation is, you generally have some natural, I think, inflation effects that drive some of this growth as well.
So we see a lot of strength there. And some of those are Capital One specific comments, I’m making and several of those are really kind of industry points.
A – Jeff Norris: Next question please.
Operator: Our next question comes from John Pancari with Evercore ISI. Your line is open.
John Pancari: Good afternoon. On the — back to the — your commentary around the slowing pace of the increase in delinquencies that you’re seeing in card and some of the stabilization that you’re citing. I know you indicated that charge-offs should of course, lag that. Can you give us maybe some way to think about how long that lag could be? Is it a two to three quarter type of window that we’re looking for losses to follow through on that front? Thanks.
Richard Fairbank: Well, I don’t want to make a precise prediction on that. I want to first of all, pull up and say, when we — the thing that we tell everybody to look at is, what we say is, what we look at is delinquencies because that is the first indicator, that’s why we have been talking not just quarterly but really even looking at the last couple of months and seeing the sort of more stabilization on the credit card side, which is very encouraging. Delinquency basically customers go delinquent and ultimately charge off six months later. And so there is — but sometimes they go faster, sometimes they go slower. And of course, lots of times they make their payments. But we’re talking about these things being measured in over a couple of quarters. The relationship between the delinquencies and the charge-offs .
Jeff Norris: Next question, please.
Operator: Our next question comes from Erika Najarian with UBS. Your line is open.
