CECL drains $2.9bn from Capital One’s CET1

Adoption of the Current Expected Credit Loss (CECL) model for setting loan reserves will knock $2.9 billion off of Capital One’s regulatory equity capital over four years.

Allowances for credit losses increased 40% to $10.1 billion on January 1, when the switch to the new model took place. Allowances for consumer banking climbed the most percentage-wise, by 48% to $1.5 billion. Credit card allowances jumped 42% to $7.7 billion, and those for commercial loans 13% to $876 million.

Capital One

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