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Capital One sees sharp drop in profits

July 21, 2012

One of the largest credit card companies in the world recently revealed that profits during the second quarter of the year fell by 90 percent thanks to major acquisitions.

One of the largest credit card companies in the world, which often handles merchant services, revealed that profits during the second quarter of the year fell by 90 percent thanks to major acquisitions.

Capital One said that during its previous quarter, shares gained just 16 cents each, compared to $1.97 during the last period. There was some good news however, when the financial firm’s revenue increased to $5.06 billion, 27 percent higher than the quarter prior. This year alone, Capital One bought HSBC’s U.S. card business and ING Direct USA.

The head of the company said that the future was bright for those who owned shares in the sixth biggest U.S. commercial bank.

“While second-quarter results reflect significant purchase accounting impacts and other items, the strong underlying performance of our businesses continues to demonstrate that we’re well positioned to deliver sustained shareholder value,” ” said CEO Richard Fairbanks in a statement.

Capital One will have to spend a good chunk of the money it earned to settle a case brought by the Consumer Financial Protection Bureau. The company agreed to pay $210 million in fines and refunds after misleading customers about its program.

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