Company Overview

Capital One is known for its proprietary data-driven method of uncovering new markets for credit cards. Its balance transfer cards, introduced in 1991, made the company a major, and much-imitated, industry player. It has almost 50 million customer accounts, and operates in mortgage services, auto finance, health care finance, insurance, and other consumer banking and financial areas. The firm beefed up its non-cards businesses significantly in 2005 with the acquisition of Hibernia, a New Orleans–headquartered bank. In 2006, Cap One became one of the 15 largest banks in the country with the purchase of North Fork Bancorporation and its 250 bank branches in New York, New Jersey, and Connecticut. Cap One also plans to open 40 or so Hibernia branches in Texas, where the bank relocated after Hurricane Katrina. Credit cards are still the company’s bread and butter, and it launches new products with amazing frequency—prepaid cards, subprime cards, affinity cards for customers with a wide range of interests (e.g., chess players) and affiliations (e.g., people of Irish heritage), and so on. What is more, the deposits of Capital One’s acquired banks have been used, in part, to fuel expansion of its card business. But there have been some speed bumps in Capital One’s path in recent years. After federal regulators raised concerns about its large number of high-risk cardholders, in 2002 Capital One agreed to bolster its cash reserves and take other steps to reduce credit exposure. The company also laid off more than 1,500 call-center employees in 2003 and 2004 as part of a call center consolidation effort.