Capital One ( COF) plans to slash its dividend to 5 cents a share from 37.5 cents in an effort to preserve more than $500 million in capital annually.

The bank said Monday the next dividend will be declared in April and paid in May.

Capital One said the preservation of $500 million in capital is equivalent to about 25 basis points of the company's tangible common equity to tangible managed assets, or TCE, ratio. The TCE measure places more weight on hard assets and liabilities, stripping out assets that are more difficult to value like intangible items and goodwill.

In a statement, Chairman and CEO said Richard Fairbank said investors have indicated they "value strong capital positions over dividend streams at this point in the cycle. Today's announced action is one of the most efficient ways to support capital levels in the current environment."

The move by Capital One to cut its dividend follows news on Friday that Wells Fargo ( WFC) was paring its quarterly dividend to 5 cents from 34 cents.

Other banks, such as JPMorgan Chase ( JPM) and Bank of America ( BAC) have slashed dividends recently, putting capital preservation ahead of dividend payouts.

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