TSX runs higher on rate cut expectations
MCLEAN, Va. - Capital One Financial Corporation (NYSE:COF) announced Tuesday that its preliminary Stress Capital Buffer Requirement (SCB) will decrease to 4.5 percent, effective October 1, 2025. The announcement comes as the company’s stock trades near its 52-week high of $215.62, having delivered an impressive 54% return over the past year.
The new buffer requirement was calculated by the Federal Reserve through its 2025 Comprehensive Capital Analysis and Review (CCAR) process. Capital One’s current SCB of 5.5 percent, determined in the 2024 CCAR process, will remain in effect until the end of the third quarter of 2025.
The Federal Reserve issued a notice of proposed rulemaking in April 2025 that would change how the SCB is calculated. The proposal would average stress test results over two consecutive years to determine the requirement. However, this proposal has not been finalized, and Capital One’s newly announced preliminary SCB was calculated under the current framework.
The Stress Capital Buffer Requirement is a key regulatory metric that helps ensure financial institutions maintain adequate capital to withstand economic stress.
Capital One Financial Corporation had $367.5 billion in deposits and $493.6 billion in total assets as of March 31, 2025, according to information provided in the company’s press release statement. Headquartered in McLean, Virginia, the company offers financial products and services to consumers, small businesses, and commercial clients.
In other recent news, Capital One Financial completed its acquisition of Discover Financial Services on May 18, 2025. This significant merger has led to several developments, including a raised price target from JPMorgan, now set at $210, due to anticipated synergies such as cost savings and new revenue opportunities. UBS has maintained its Buy rating on Capital One, with a steady price target of $240, highlighting the company’s strong financial position with a Common Equity Tier 1 (CET1) ratio of 13.4%. Moody’s Ratings confirmed Capital One’s ratings and upgraded Discover’s ratings following the merger, reflecting improved capitalization and expected profitability. S&P Global Ratings also upgraded Discover’s issuer credit ratings post-acquisition, aligning them with Capital One’s ratings. These actions underscore the financial strengthening of Capital One, now the eighth-largest bank in the U.S. by total assets. The merger is expected to yield financial synergies of approximately $2.7 billion annually, enhancing Capital One’s business model. The Federal Reserve’s stress test results further support the stability of major banks, including Capital One, amid hypothetical severe economic scenarios.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.