Capital One 2005 Annual Report Download - page 3

Today, the end game that we envisioned many years ago is playing out before our eyes. Consolidation in the credit card
market has largely run its course. Capital One and the other top players now have almost 90% of all credit card assets in
America. Other consumer lending businesses are marching inexorably toward national consolidation.
With the acquisition of Hibernia, we’re delivering on our strategy of combining the power of national scale lending and
local scale banking. Hibernia is the banking leader in Louisiana with 21% deposit share of the local market, and it has a
strong growth play in Texas – one of the fastest growing banking markets in America.
We don’t need to compete everywhere to be successful. We can be selective and choose to enter the most financially attractive
national lending businesses and local banking markets. In the markets where we choose to compete, we are positioning
ourselves to be “end game players.”
As we’ve diversified, we’ve created one of the nation’s largest customer franchises with almost 50 million customer accounts.
We’ve built a powerful national brand through our direct marketing and television advertising campaigns. And we’ve
developed the ability to serve our customers across every marketing channel – direct mail, the telephone, the internet, our auto
dealer network and our newly acquired bank branches. Our national brand, massive customer base and multiple marketing
channels provide strong competitive advantages that we can leverage to drive growth and profits across each of our businesses.
We’re the only former monoline to have undertaken such massive diversification, and we’re well-positioned to win in
each of our businesses. Capital One already has the scarcest commodity – a national scale credit card business. We’re
building growth platforms during critical consolidation windows in key consumer lending businesses. And we’ve added
the capability to gather deposits and compete locally in banking with Hibernia.
Hibernia Provides A Banking Growth Platform
We scoured the country to find the right partner as we entered into banking. In Hibernia, we found the perfect fit.
Hibernia has market-leading share in Louisiana and a proven growth strategy in the best markets in Texas. Hibernia
also has a capable management team, led by Herb Boydstun, and talented people who are dedicated to delivering
great service to their customers.
Shortly before we closed the Hibernia deal, New Orleans and the surrounding areas were hit by Hurricane Katrina – the biggest
natural disaster in America’s history. The courage and commitment of Hibernia’s people following this tragedy was awe-inspiring.
They rose to the occasion at every turn, and are working with our customers and communities to help lead the recovery.
We learned a lot about Hibernia’s people as they faced adversity, and we were incredibly impressed by everything we saw.
Our integration with Hibernia is going smoothly. The Louisiana franchise is delivering strong results, especially as new
investments flow into the region. We’re accelerating Hibernia’s already successful de novo growth strategy in the
fastest growing markets in Texas. Our de novo branches are already outperforming the competition in these markets.
We’re building a strong retail branch model which preserves Hibernia’s tradition of great customer service, with a focus
on consumer deposits and small business – some of the most profitable segments in banking. Capital One brings
significant value to our newly acquired banking business. We already have millions of customers in Louisiana and
Texas that we can now serve through our convenient branches. We can offer very competitive national lending products
through our branches. And we can leverage our national brand to accelerate growth.
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Capital One now has
one of the most powerful
brands in financial
services with 97% total
brand awareness.
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