COF's general return on common assets (ROAA) was one.18% in 3Q16, up from 1.13% while in the sequential quarter, but down one.43% from the year-ago quarter. The year-over-year decline is primarily because of higher provision expense associated to continued development of the credit score card portfolio as well as some difficulty assets in the company's vitality portfolio and taxi medallion portfolio and $63 million of expenses relevant to a develop during the U.K. Payment Protection Insurance coverage purchaser refund reserve.
The company's return on average equity (ROE) was 8.59% in 3Q16 up from seven.64% during the sequential quarter, but down from 9.54% in the year-ago quarter to the very same motives noted over. Total revenue growth, while enhanced, stays difficult amid strong competition for card, automobile, and business loans.
COF's stability sheet has continued to broaden, developing 1.7% from your sequential quarter and 10% in the year-ago quarter. The year-over-year growth is due to each the GE Healthcare acquisition which closed at the end of 2015 along with the previously mentioned growth in the company's large domestic credit score card portfolio, which expanded 3% relative towards the sequential quarter and 11% relative to the year-ago quarter.
Fitch believes this development during the card portfolio is due to COF's continued efforts in marketing both its QuickSilver and Venture cards, the two of which have comparatively good rewards applications. The expense of these rewards packages have partially offset a lot of the rewards to earnings through the growth mentioned above.
COF's deposit portfolio has grown a lot more modestly, expanding 2% in the sequential quarter and 6% from your year-ago quarter to $226 million as of 3Q16. Given that loans grew faster than deposits the company's loan-to-deposit ratio remained elevated at somewhere around 106% as of 3Q16. COF primarily made use of securitizations and modest increases in wholesale borrowing to fund the loan growth.
Offered the growth during the loan portfolio, specifically since it relates to comparatively larger yielding credit card receivables, the company's net interest earnings grew 4% from your sequential quarter and 11% from your year-ago quarter. Similarly the company's net curiosity margin (NIM) ticked as much as a powerful six.79% in 3Q16, up from six.73% in the two the sequential and year-ago intervals.
When COF's buy volume enhanced 12% year-over-year, complete non-interest earnings only grew 2% from your sequential quarter and 4% from the year-ago quarter, as Fitch believes COF is continuing to work with far more of its interchange income to fund its good rewards programs mentioned over.
Complete non-interest expenditures for COF grew 2% in the sequential quarter and 6% through the year-ago quarter as the company continues to handle costs cautiously within the context of its efforts to build digital working platforms and consumer interfaces. Relative to each the sequential and year-ago quarters, COF did supply constructive operating leverage and the company's efficiency ratio ticked down to 52.02% in 3Q16.
As mentioned provision cost elevated drastically improved relative on the year-ago quarter as a result of acquisition of the GE Healthcare portfolio, development in credit card and auto loan receivables, and some year-over-year deterioration the energy and taxi medallion portfolios. Relative to the sequential quarter provision was flat as provision associated to growth while in the credit card and automobile loan portfolios was offset by some moderating of your energy loan portfolio.
COF's all round credit score excellent remains fantastic, together with the company's net charge-off (NCO) ratio ticking up modestly to 2.10% in 3Q16 which relative on the final 10 years is still low, although Fitch would note that COF's 30 day+ delinquency ratio is up nine basis points through the prior yr period, still strong compared to historical averages. Moreover, this quarter's NCO ratio compares to 2.01% while in the sequential quarter and 1.69% from the year-ago quarter.
The up-tick was resulting from continued seasoning and growth within the domestic credit card and car loan portfolios. Fitch continues to think credit score high-quality in these portfolios is close to cyclical troughs, and would assume even further reversion in NCO ratios above a medium-term time horizon.
As mentioned, within the business portfolio each the vitality and taxi medallion portfolios remain problematic. Given the rise in energy costs in excess of the final a number of months, there continues to be some moderating of your deteriorating trends from the power portfolio. Total energy loans are right down to $5.four billion, or three.98% with the complete commercial portfolio, and one.11% with the total loan portfolio. Provided the reduced loan balances, the allowance was down sequentially by $22 million, however the power reserve coverage stays very good at 9.18% of loans held for investment.
COF's taxi medallion portfolio continues to check out credit deterioration amid the proliferation of trip sharing services like Uber and Lyft. Nonetheless, the exposure stays modest at one.16% of commercial loans and 0.32% of complete loans. The allowance for this portfolio is $111mn as of 3Q16, representing reserve coverage of 14.32% of loans held for investment, but only 1.7% on the complete allowance.
COF's Basel III Typical Equity Tier one (CET1) ratio beneath the standardized approach as from the finish of 3Q16 was ten.6% relative to ten.9% on the finish of 2Q16. The decline was attributable to some share repurchases throughout the quarter along with the stability sheet growth mentioned over. Related to last quarter, COF noted that standardized ratio is going to be the long-term capital constraint for that corporation.2016 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Phone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in full or in element is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in generating other reviews (together with forecast details), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to become credible. Fitch conducts a reasonable investigation of the factual data relied on by it in accordance with its ratings methodology, and obtains fair verification of that info from independent sources, on the extent this kind of sources are available for a given protection or inside a provided jurisdiction. The method of Fitch's factual investigation as well as the scope of your third-party verification it obtains will vary based on the nature on the rated protection and its issuer, the needs and practices from the jurisdiction through which the rated protection is presented and sold and/or the issuer is located, the availability and nature of appropriate public information, entry on the management of the issuer and its advisers, the availability of pre-existing third-party verifications for example audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reviews, legal opinions along with other reviews provided by third events, the availability of independent and competent third- party verification sources with respect for the distinct protection or while in the unique jurisdiction from the issuer, plus a number of other components. Consumers of Fitch's ratings and reports need to understand that neither an enhanced factual investigation nor any third-party verification can guarantee that all the info Fitch relies on in connection with a rating or possibly a report might be accurate and full. Eventually, the issuer and its advisers are accountable to the accuracy of the info they supply to Fitch and also to the market in giving paperwork as well as other reports. In issuing its ratings and its reports, Fitch have to depend on the do the job of experts, like independent auditors with respect to money statements and attorneys with respect to legal and tax issues. Even further, ratings and forecasts of money together with other data are inherently forward-looking and embody assumptions and predictions about future events that by their nature can't be verified as facts. Because of this, despite any verification of current facts, ratings and forecasts could be impacted by future events or problems that weren't anticipated at the time a rating or forecast was issued or affirmed.
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