Capital One 2005 Annual Report Download - page 13

PART I
Item 1. Business.
Overview
Capital One Financial Corporation (the “Corporation”) is a diversified financial services company, incorporated in Delaware
on July 21, 1994, whose banking and non-banking subsidiaries market a variety of financial products and services. The
Corporation’ s principal subsidiaries include Capital One Bank (the “Bank”), a Virginia state chartered bank that currently
offers credit card products and deposit products and can also engage in a wide variety of lending and other financial
activities; Capital One, F.S.B. (the “Savings Bank”), a federally chartered savings bank that offers consumer and commercial
lending and consumer deposit products; Capital One Auto Finance, Inc. (“COAF”), which offers automobile and other motor
vehicle financing products; and Hibernia National Bank (the “National Bank”), a nationally chartered bank that offers a broad
spectrum of financial products and services to consumers, small business and commercial clients. Capital One Services, Inc.
(“COSI”), another subsidiary of the Corporation, provides various operating, administrative and other services to the
Corporation and its subsidiaries. The Corporation and its subsidiaries are collectively referred to as the “Company.” Unless
dicated otherwise, the terms “Corporation”, “we”, “us”, and “our” refer to the Corporation and its consolidated subsidiaries.
in
The Corporation became a financial holding company on May 27, 2005, thereby allowing the Corporation the authority to
engage in certain activities that are not permissible for bank holding companies, including the authority to acquire all of the
bsidiaries of Hibernia Corporation (“Hibernia”), which occurred in November 2005. su
As of December 31, 2005, we had $47.9 billion in deposits and $105.5 billion in managed loans outstanding. We are among
the largest issuers of Visa® (“Visa”) and MasterCard® (“MasterCard”) credit cards in the United States based on managed
redit card loans outstanding and we are the 20th largest depository institution in the United States. c
We offer our products throughout the United States. We also offer our products outside of the United States principally
through Capital One Bank (Europe) plc, an indirect subsidiary of the Bank organized and located in the United Kingdom (the
“U.K. Bank”), and a branch of the Bank in Canada. Our U.K. Bank has authority, among other things, to accept deposits and
provide credit card and installment loans. Important factors underlying the growth of our lending and deposit activities
include industry dynamics, including the level of competition, and our business strategies. These business strategies involve
analyzing and applying results derived from large quantities of data to reduce credit risk, mass customizing products for
onsumers and achieving operational efficiency. c
We strive to use data analysis to differentiate among customers based on credit risk, usage and other characteristics and to
match customer characteristics with appropriate product offerings. To do this, we have built, and continue to enhance,
sophisticated models and information systems. We employ a well-trained staff to identify, develop and market credit cards
and other consumer products and services to satisfy the demands of a competitive and ever changing marketplace. By
actively testing a wide variety of product and service features, marketing channels and other aspects of offerings, we design
customized solicitations, products and services that are targeted at specific credit customer segments, thereby enhancing
response levels and maximizing returns on investment within given underwriting parameters.
We build on information derived from our initial sources with continued integrated testing and model development to
improve the quality, performance and profitability of our solicitation and account management initiatives. We use this
approach in all areas of our business, including solicitations, account management, credit line management, pricing strategies,
usage stimulation, collections, recoveries, and account and balance retention. An important element of our diversification and
growth strategy has been to apply our methodologies to consumer financial products and services beyond credit cards, such
s automobile and small business lending. a
Our common stock is listed on the New York Stock Exchange under the symbol COF. Our principal executive office is
located at 1680 Capital One Drive, McLean, Virginia 22102 (telephone number [phone]). The Corporation maintains
a website at www.capitalone.com. Documents available on our website include (i) Codes of Business Conduct and Ethics for
the Corporation and the National Bank, (ii) the Corporation’ s Corporate Governance Principles; (iii) and charters for the
Audit and Risk, Compensation, Finance and Trust Oversight, and Governance and Nominating Committees. These
documents are also available in print to any shareholder who requests a copy. In addition, we make available free of charge
through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports as soon as reasonably practicable after electronic filing or furnishing of such material with the
SEC.
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