Capital One 2006 Annual Report Download - page 4

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2
are building a range of distribution channels to meet customers where they are. These
are structural benefits that will give these banks an enduring advantage in building deep,
multi-product customer relationships.
Most banks are keenly following the dramatic consolidation trends in the industry, but
with a different focus. Typically, they’re focused on the consolidation happening one
institution at a time. But consolidation is happening faster than that—one product at a
time. The windows to build national consumer lending businesses will close well before
geographical consolidation runs its course. As local and regional banks continue to
consolidate, they are building greater local scale, but are not necessarily addressing the
nationalization of many lines of business. And even the largest banks, which have both
national and local scale businesses, often end up losing their local touch because they
manage their local franchises nationally. Building the right kind of scale and executing
at the right level are essential to winning in banking.
At Capital One, our strategy works backwards from this “endgame” vision of banking. We
have built strong national consumer businesses in credit cards, auto finance, home loans,
installment loans, small business and healthcare finance. In local banking, we now have
the leading market share in Louisiana, a top three position in the greater New York region
and a strong growth platform in Texas. We have over 50 million customer accounts and
awell-recognized national brand. While having a solid “bone structure” doesn’t guarantee
our success, it’s a great head start.