Capital One 2001 Annual Report Download - page 15

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Consumer lending is a natural extension of the credit card business and
a huge long-term growth opportunity for Capital One. Of the $7 trillion in U.S.
consumer loans on the books in 2000, only $555 billion—less than 10%—was in
credit card balances. The rest was in auto loans, installment loans, financing for
elective medical procedures, home equity loans and mortgages.
We entered the $1 trillion auto finance market three years ago with an
acquisition that brought us $300 million in loans. In October 2001 we added $710
million with the acquisition of PeopleFirst, the Internet’s largest originator of auto
loans. Capital One now has an auto finance portfolio of $4 billion.
With installment loans, we’re building from the ground up. We target low-risk
borrowers and provide them with a very competitive rate. Our loan volume has tripled
in three years. In other installment loan sectors we are selectively acquiring small, well-
managed companies that we see as growth platforms. The most recent is Amerifee, the
nation's leading provider of patient financing solutions for elective dental, orthodontic,
vision and cosmetic procedures.
We believe we can succeed in consumer lending because it plays to our strengths in
mass customization and direct marketing. These capabilities, combined with our
information-based strategy (IBS), give us an advantage over most of our competitors,
who still rely on a one-size-fits-all strategy. With these strengths and IBS, Capital One
can grow profitably in consumer lending markets while cutting prices, just as it did in
credit cards.
With the addition of new lending
businesses, we didn’t just grow,
we multiplied.
Capital One
auto loans
reach $4.0 billion
Capital One
installment
loans reach
$2.9 billion
acquired
PeopleFirst
acquired
Amerifee
acquired
Summit
Acceptance
Corp.