Capital One's Credit Costs Have Improved, but Integrating Discover Will Be the Focus for 2026

Capital One has doubled down on its credit card business, acquiring Discover in an all-stock deal valued at $35.3 billion in May of 2025, making it the largest credit card issuer in the US by receivables. We like this approach for Capital One, as we think the bank paid a fair price for the assets and there was clear strategic value to the deal, thanks to Discover's vertically integrated ATM and payment networks. While Capital One will need to realize significant revenue and expense synergies to justify the share dilution that came as part of the deal, we see a clear roadmap for Capital One to meet its goals.