Capital One Financial Corporation (NYSE: COF) has announced its preliminary Stress Capital Buffer (SCB) requirement, as calculated by the Board of Governors of the Federal Reserve System, for the 2025 Comprehensive Capital Analysis and Review process. The SCB requirement is set at 4.5 percent, effective from October 1, 2025. This marks a decrease from the previously disclosed SCB of 5.5 percent, as calculated by the Federal Reserve's 2024 CCAR process, which will remain in effect through the end of the third quarter of 2025.
The Federal Reserve issued a notice of proposed rulemaking in April 2025 to amend the calculation of the SCB. The proposed change would involve averaging stress test results over two consecutive years for determining the SCB requirement. It's important to note that the proposal has not yet been finalized, and Capital One's preliminary SCB disclosed above has been calculated under the current framework and does not reflect the proposed averaging.
This significant decrease in the SCB requirement from 5.5 percent to 4.5 percent reflects potential changes and adjustments in the regulatory landscape. It also suggests that Capital One has been able to manage its capital position effectively in line with the Federal Reserve's requirements. However, it's essential to keep an eye on how the proposed rulemaking may impact future SCB requirements and how Capital One will navigate these potential changes. The market has reacted to these announcements by moving the company's shares 1.14% to a price of $215.18. For the full picture, make sure to review CAPITAL ONE FINANCIAL CORP's 8-K report.
