Capital One to Acquire Brex for $5.15 Billion Amid Rising Profits

Capital One's Strategic Acquisition of Brex

Jan 22 (Reuters) - Capital One Financial said on Thursday it will acquire fintech firm Brex in a cash and stock deal valued at $5.15 billion and reported a rise in quarterly profit on the back of higher interest income from its credit card debt.

Shares of the consumer lender were down more than 2% after the bell.

The move comes as dealmakers prepare for another strong year in 2026, with a record slate of transactions expected as executives pursue scale to navigate rising economic and geopolitical uncertainties.

Details of the Acquisition

The deal, which is expected to close in mid‑2026, will be carried out on an approximate 50-50 cash-stock basis, Capital One said.

Impact on Capital One's Business

Brex operates in corporate cards and expense management software used by firms such as DoorDash and Robinhood, which could give Capital One greater exposure and reduce its reliance on consumer credit, cushioning it against the impact of economic downturns.

Brex operates in more than 120 countries according to its website.

Capital One said the fintech firm's chief executive and founder, Pedro Franceschi, will remain at the helm following the transaction.

FOURTH-QUARTER EARNINGS

U.S. consumer spending rose at a solid pace in November and October, suggesting the economy was on track for a third consecutive quarter of strong growth.

Economic momentum has been underpinned largely by resilient household demand as well as a narrowing trade deficit, with imports declining in response to President Donald Trump's broad tariff increases.

However, the tariffs have pushed up the prices of many goods, weighing unevenly across income groups.

Economists say spending strength is increasingly concentrated among higher-income households, while lower- and middle-income consumers have limited scope to switch to cheaper alternatives. 

Quarterly Earnings Overview

Capital One's net interest income — the difference between what it makes on loans and pays out on deposits — rose 54% to $12.47 billion in the fourth quarter from a year ago.

The McLean, Virginia-based company's net income available to common stockholders came in at $2.06 billion, or $3.26 per share, for the quarter, compared with $1.02 billion, or $2.67 per share, a year earlier.

CREDIT CARD CAP CONUNDRUM

Trump said last week he was calling for a one‑year cap on credit card interest rates at 10% starting January 20, but offered few details on how the proposal would be implemented or how companies would be compelled to comply.

Banking industry groups have pushed back against the proposal, warning it would restrict the availability of credit for everyday consumers.

JPMorgan Chase CEO Jamie Dimon said on Wednesday a proposal to cap credit card interest rates would amount to economic disaster.

However, Bank of America is considering options to offer new credit cards with an interest rate of 10% to satisfy Trump's demands, a source familiar with the matter said on Thursday.

The introduction of an interest rate cap would deal a significant blow to Capital One Financial, which has one of the most credit-card‑dependent business models among major U.S. lenders.

(Reporting by Pritam Biswas in Bengaluru; Editing by Shreya Biswas)