Capital One

Infobox Company
name = Capital One Financial Corporation

type = Public (nyse|COF)
slogan = What's in your wallet?
foundation = Richmond, Virginia 1988
location = McLean, Virginia, USA
key_people = Richard Fairbank, CEO
Gary Perlin, CFO
num_employees = 31,800 (2006)cite web |title=Capital One Financial Corporation |publisher=Hoover's, Inc. |url=http://hoovers.com/capital-one/--ID__42309--/free-co-factsheet.xhtml |accessdate=2008-01-28 ]
industry = Financial Services
products = Credit Cards, Loans, Savings
operating_income = $4.93 billion USD (2006)
net_income = $1.57 billion USD (2007)cite press release |title=Capital One Reports Fourth Quarter Earnings |publisher=Capital One Services, Inc. |date=2008-01-23 |url=http://phx.corporate-ir.net/phoenix.zhtml?c=70667&p=irol-newsArticle&ID=1099310&highlight= |accessdate=2008-01-28 ]
revenue = $15.19 billion USD (2006)
homepage = [http://www.capitalone.com/ www.capitalone.com]

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. [cite web |url=http://www.dmnews.com/cms/dm-news/direct-mail/38043.html |title=PRC Says OK To Capital One NSA Extension | DMNews.com |accessdate=2006-11-27]

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. [http://www.northforkbank.com/, Retrieved on 2008-04-04.] [http://superiorsavings.com/, Retrieved on 2008-04-04.]

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

Capital One Bank (USA), N.A. and Capital One, N.A. are nationally chartered institutions, regulated by the Office of the Comptroller of the Currency, Department of the Treasury.

Divisions

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.

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.

Unusual growth

Unlike other diversified financial services firms, Capital One began as consumer lending "" -- 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. [ [http://www.gatewayva.com/biz/virginiabusiness/magazine/yr2003/sep03/capone_fairbank.shtml Virginia Business Online: Q&A with Richard Fairbank ] ]

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.Fact|date=January 2008 Capital One had one of the largest databases of consumer data at one time: over 3 terabytes of data by 1998. [ [http://findarticles.com/p/articles/mi_m0EIN/is_1998_Sept_16/ai_53012042 Capital One Selects Ardent Software's DataStage for Enterprise-Wide Data Warehouse Projects] ] 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.

ponsorships

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 one Coca Cola Championship football club Nottingham Forest.

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),Fact|date=June 2008 though in 2005 it was 4th in financial services (34th overall).Fact|date=June 2008

In 2002, Capital One won the Wharton Infosys Business Transformation Award for its innovative strategy specifically related to credit card products.Fact|date=June 2008

Criticism

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. [ [http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/ABigLendersCreditCardTrap.aspx A big lender's credit card trap - MSN Money ] ] Defenders of the practice argue that credit issuers should not be held responsible for borrowers' decisions.

Decoupled debit card

In May 2007, CapitalOne began an experiment that has come to be known as a Decoupled debit card [ [http://www.javelinstrategy.com/2007/06/04/capone-turns-acquisition-on-its-head-part-i/ CapOne Turns Acquisition on its head] ] [ [http://thebankwatch.com/2007/06/04/capitalone-becomes-a-bank-with-checking-accounts/ CapitalOne becomes a Bank with checking accounts] ] . This card is novel in that prior to this launch, a debit card was always tied to a traditional financial institution, such as a bank or credit union. CapitalOne's Mastercard-branded decoupled card did not require an account be opened with a "retail" financial institution, and was made in partnership with the Ukrops grocery chain, based in CapOne's hometown of Richmond, VA. The card was also tied to a reward program offered by Ukrops. That one year experiment ended in May of 2008 [ [http://www.digitaltransactions.net/newsstory.cfm?newsid=1776 CapOne says its decoupled debit card pilots ended on schedule] ] , and has been followed up with a national rollout of its own version of a decoupled debit card tied to its own reward program [ [http://www.paymentindustryinsider.com/2008/07/decoupled-debit-card-lives-again/ Decoupled debit card lives again!] ] .

Management and corporate governance

Key executives include:facts|date=January 2008
*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

The current members of the board of directors of Capital One are:facts|date=January 2008
*E.R. "Bo" Campbell: Former Chairman of Hibernia National Bank
*W. Ronald Dietz: President of W.M. Putnam Company
*Richard Fairbank: CEO and Co-Founder of Capital One
*Patrick Gross: Co-Founder of American Management Systems
*Ann Fritz Hackett: President of Horizon Consulting Group
*Lewis Hay III: CEO and Chairman of Florida Power & Light
*Pierre Leroy: Divisional President at Deere & Company
*Mayo A. Shattuck III: CEO and Chairman of Constellation Energy
*Stanley Westreich: Former President of Westfield Realty

ee also

*Hibernia National Bank (acquired in 2005)
*North Fork Bank (acquired in 2006)
*Capital One Tower

References

External links

* [http://www.capitalone.com/ Capital One's web site]
* [http://finance.yahoo.com/q/pr?s=COF COF Profile] from Yahoo Inc.
* [http://www.capitalone.com/autoloans Capital One Auto Loans and Auto Refinancing]