Capital One

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Capital One Financial Corporation

Type	Public (NYSE: COF)
Founded	Richmond, Virginia 1988
Headquarters	McLean, Virginia, USA
Key people	Richard Fairbank, CEO Gary Perlin, CFO
Industry	Financial Services
Products	Credit Cards, Loans, Savings
Revenue	$15.19 billion USD (2006)^[1]
Operating income	$4.93 billion USD (2006)^[1]
Net income	$1.57 billion USD (2007)^[2]
Employees	31,800 (2006)^[1]
Website	www.capitalone.com

Capital One Bank in Wake Village, Texas

Capital One Financial Corp. (NYSE: COF) is a McLean, Virginia-based bank holding company specializing in credit cards, home loans, auto loans, banking, and savings products. A member of the Fortune 500, the company helped pioneer the mass marketing of credit cards in the early 1990s, and it is now the fourth largest customer of the United States Postal Service.^[3]

Capital One was founded in 1988 by Richard Fairbank and Nigel Morris as a spin-off of Richmond, Virginia-based Signet Banking Corp (which was subsequently acquired in 1997 by First Union Corp.).

Capital One entered the retail banking market with its acquisition of New Orleans, Louisiana-based Hibernia National Bank in 2005 and Melville, New York-based North Fork Bancorporation in 2006. North Fork Bank and Superior Savings of New England, both subsidiaries of North Fork Bancorporation, began using the branding of Capital One Bank on March 10, 2008.^[4]^[5]

Capital One responded to the 2007 subprime mortgage financial crisis by jettisoning its mortgage platform, GreenPoint Mortgage, due in part to investor pressures.

1 Divisions
- 1.1 Capital One Auto Finance
- 1.2 International operations
2 Unusual growth
3 Sponsorships
4 Diversity and awards
5 Controversy
6 Management and corporate governance
7 See also
8 References
9 External links

[edit] Divisions

[edit] Capital One Auto Finance

Capital One Financial Corporation is the parent company of [Capital One Auto Finance], or COAF, based in Plano, Texas. After buying PeopleFirst, it became the largest Internet auto lender, as well as one of the top US auto lenders overall.

The company, which previously sold auto loans only through direct mail and auto dealerships, lets auto owners refinance existing auto loans and shoppers apply for new auto loans online. A decision usually comes within 15 minutes, after which the buyer receives a "blank check" for up to the approved auto loan amount, which the buyer uses to purchase a car. To the dealership, it is as if the buyer were paying cash. The checks can be used to purchase a new or used vehicle, or to refinance an existing auto loan with another lender.

COAF originates auto loans across the credit spectrum.

[edit] International operations

Capital One commenced operations in Canada in 1996. Its head office is located in Toronto, Ontario. Unlike its diversified American parent, the Canadian business does not currently operate outside of the credit card market. Similar to the US Parent, Capital One Canada is Canada Post's second largest customer.

The UK headquarters of Capital One is in Nottingham, England.

Capital One also has a presence in Spain, with the local office located in Madrid.

The company was once active in France and South Africa, but has since withdrawn from these markets.

[edit] Unusual growth

Unlike other diversified financial services firms, Capital One began as consumer lending "monoline" -- a company that only does consumer lending. Remaining a monoline is precarious because of the often-cyclical nature of consumer lending; it can be very profitable industry in good times and markedly unprofitable in bad, such that a monoline company -- which lacks other sources of revenue -- will go out of business or be acquired fairly cheaply during hard times. Most consumer lending monolines in the past 20 years have either gone out of business (e.g. The Money Store, NextCard, Royal Acceptance) or have been acquired (e.g. MBNA, Beneficial, First USA); Capital One is notable for having experienced neither.^[6]

Prior to this the company experienced tremendous growth as a monoline which it credited to its Information Business Strategy, a strategy it pioneered to use customer data to help tailor its products to customers, particularly subprime consumers.^{[citation needed]} Capital One had one of the largest databases of consumer data at one time, over 4 terabytes of data by 1999.^{[citation needed]} It attempted to leverage this strategy outside of the finance industry, most notably in the cell phone market as AmericaOne which it eventually sold to Sprint. While many monolines were acquired by larger, diverse banks, Capital One adopted the opposite strategy by expanding into retail banking in 2005. This was accomplished through the acquisition of Hibernia and North Fork, two large regional banks.

[edit] Sponsorships

Capital One is a major sponsor of sports teams. In 2001 Capital One became the principal sponsor of the Florida Citrus Bowl, an annual college football game played in Orlando, Florida, renaming it the Capital One Bowl. In the UK, the company currently sponsors two Coca Cola Championship football clubs, Sheffield United and Nottingham Forest.

[edit] Diversity and awards

Capital One received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2003, the second year of the report. Capital One's American division has a large number of foreign-born employees: in 2003 it sponsored more people for H-1B visas than any other financial services company (19th overall),^[7] though in 2005 it was 4th in financial services (34th overall).^[8]

In 2002, Capital One won the Wharton Infosys Business Transformation Award for its innovative strategy specifically related to their credit card products.

[edit] Controversy

Like most credit card companies that issue cards to people with poor or no credit (called "subprime"), Capital One offers multiple cards with low limits to some consumers, which can result in multiple over-limit and late payment fees and is considered by some consumer advocates to be predatory.^[9] Defenders of the practice argue that credit issuers should not be held responsible for borrowers' decisions.

To date, Capital One has not disclosed its customers' total credit limits to credit reporting agencies.^[10] This could result in lower credit scores for the company's customers, since it could artificially increase a customer's utilization, a measure of credit balance as a percentage of credit line. Capital One announced plans to end this practice, and announced that it would report credit limits to credit reporting agencies by the end of 2007.^[11]

[edit] Management and corporate governance

Key executives include:^{[citations needed]}

Richard Fairbank: Chief Executive Officer, President
Gary Perlin: Chief Financial Officer, Executive Vice President, Principal Accounting Officer
Ryan Schneider: President, Card Services
John Finneran: Executive Vice President, General Counsel, Secretary
Matthew Schuyler: Executive Vice President, Chief Human Resources Officer
Lynn Pike: Chief Operating Officer, Banking Services
Jory Berson: Executive Vice President, Global Financial Services
David Lawson: Executive Vice President, President and Chief Executive Officer, Capital One Auto Finance
Peter Schnall: Executive Vice President, Chief Risk Officer
Rob Alexander: Executive Vice President, Chief Information Officer