Card Issuer Profile: Capital One

Table of Contents

• Overview
  • Catalyst
  • Summary
• Table of Contents
• Table of figures
• Table of tables
• Capital One
  • Key findings
  • Company overview
    • Background
    • Ownership and Management
      • Capital One Board of Directors
      • Employees
      • Management values
    • Company structure
    • Geographic coverage
  • Strategic focus
    • In the US, Capital One' s strategic focus has changed since the 1990s
      • Capital One has been diversifying its revenue stream by developing other business areas
      • In addition, Capital One has refocused its issuing business on transactors
    • In the US, Capital One has been improving the recognition of its brand
    • In the UK, Capital One' s strategy has focused on attracting new cardholders by offering one of the longest interest free transfer periods in the market
      • In the UK, Capital One continues to focus primarily on cardholders who revolve a balance
      • Capital One has been trying to establish itself as a financial services provider by offering loans, mortgage and savings products
    • In Canada, Capital One' s strategy involves offering a range of cards for different types of consumer
      • However, some of the cards now being offered suggest Capital One is slowly adopting its US strategy in Canada
  • Card statistics
    • Number of cards
    • Balances outstanding
      • Balances outstanding in the US have seen modest growth
      • In the UK, difficult trading conditions have resulted in slow growth
      • The growth of balances outstanding in Canada has also slowed
  • Key financials
    • Profit and loss account
      • The growth in profits has been fueled by growing revenues and keeping costs under control
    • Balance sheet
  • Card product offering
    • In the US, Capital One has a wide range of cards
    • Capital One has a ' No Hassle' loyalty program in the US
      • Cards which are part of the No Hassle Cash program earn cashback
      • A variation of the program is the No Hassle Miles program
    • The high end cards in the US have added services and benefits for the cardholder
    • In the UK, Capital One has a far more limited range of credit cards
    • In the UK, Cardholders have the opportunity to select the appearance of their Capital One card
    • In Canada, Capital One' s range of cards is smaller than in the US, but it employs the same strategy
    • In Canada, two of Capital One' s cards track the base rate
  • Company outlook
    • Capital One has moved into a much stronger position as a result of diversifying its business
      • One issue could be a reduction in interchange fees
    • Overseas, it seems that Capital One will continue to struggle in the UK market and thrive in Canada
      • Capital One could try to adopt its US strategy for the UK
      • The outlook is brighter in Canada
    • Expansion to other markets is a possibility
    • Capital One has yet to enter the co-branding arena
    • Nonetheless, Capital One has a bright future
  • Datamonitor Competitor Benchmark
• APPENDIX
  • Definitions of terms used in this report
    • Affinity card
    • Charge card
    • Co-branded card
    • Commercial card
    • Credit card
    • Premium cards
    • Private label card
  • Data relating to the graphics in this profile
  • Methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: Capital One Board of Directors, 2006
    • Table 2: Capital One Executive Officers, 2006
    • Table 3: Capital One branches by region, 2006
    • Table 4: Charge-off rates for key US issuers, 2004-2006
    • Table 5: Capital One' s classification of credit ratings
    • Table 6: Capital One Card offering, US, 2007
    • Table 7: Capital One No Hassle Miles redemption rates, 2007
    • Table 8: Capital One Credit Cards, UK, 2007
    • Table 9: Capital One Credit Cards, Canada, 2007
    • Table 10: Scorecard logic, part one
    • Table 11: Scorecard logic, part two
    • Table 12: Capital One - Cards in issue, 2001-2005
    • Table 13: Capital One - Balances outstanding, 2002-2006
    • Table 14: Capital One' s transaction values, revenues, outstandings and profits from its US Cards business, 2001-2006
    • Table 15: Capital One' s income statement, 2003 - 2006
    • Table 16: Capital One' s balance sheet, 2003-2006
    • Table 17: Current relevant Datamonitor publications, 2007
    • Table 18: Future relevant Datamonitor publications, 2007
  • List of Figures
    • Figure 1: Capital One has evolved from monoline issuer to a fully fledged financial services supplier, 1990s-2007
    • Figure 2: US Cards is the biggest contributor to Capital One' s net income
    • Figure 3: Capital One has a limited global presence, 2007
    • Figure 4: The Capital One business has diversified, 1999-2006
    • Figure 5: Transaction values have grown more quickly than outstandings, Capital One, 2001-2006.
    • Figure 6: Capital One enjoys a high level of brand awareness, US, 2006
    • Figure 7: Most of Capital One' s cards are in issue in the United States
    • Figure 8: The growth of Capital One' s outstanding balances in the US has slowed, 2001-2006
    • Figure 9: The level of balances outstanding in the UK has stabilized, Capital One, 2002-2006
    • Figure 10: The growth in balances outstanding in Canada has also slowed, Capital One, 2002 - 2006
    • Figure 11: Capital One has seen strong profit growth, 2001-2005
    • Figure 12: Capital One has doubled its profits in four years, 2003-2006
    • Figure 13: Capital One has more than doubled profits from its cards business, US, 2001-2006
    • Figure 14: Capital One' s balance sheet has grown with the acquisitions of Hibernia and North Fork, 2003 - 2007
    • Figure 15: Capital One' s Cashback program is marketed for its simplicity, 2007
    • Figure 16: Capital One cardholders in the UK can choose the appearance of their credit card
    • Figure 17: Datamonitor Competitor Benchmark, Capital One, 2007