Capital One 2007 Annual Report Download - page 12

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Our national small business franchise is one of the leading providers of small business
credit cards, lines of credit, and Small Business Administration loans in the United States.
Small business continued to perform well in 2007, with outstandings growth of $760
million, solid credit performance, and credit card purchase volumes up 7 percent over
2006. Our installment lending business, which includes our directly marketed installment
loans and our point-of-sale healthcare finance business, delivered profitable growth in
2007. Capital One Home Loans, our direct-to-consumer home loans business, continued
to provide a brand-defining customer experience, even as it shifted its business model
to originate and sell mostly conforming first mortgages. COHL also became the mortgage
origination platform for our bank branches, building scale and volume in footprint
which helps resiliency and improves operating leverage.
The credit environment in the UK has stabilized, and our UK credit card business is
starting to rebound. Canada arguably emerged as the Most Valuable Player in the GFS
portfolio this year, effectively competing against the entrenched, incumbent banks in
the Canadian market with great rates and compelling rewards offers.
GFS delivered strong profits, growth, and risk-adjusted returns on capital in 2007.
With investments in marketing, people, and infrastructure, our GFS businesses are
poised to carry strong momentum into 2008 and beyond.
We Are Becoming “One Bank”
2007 was a big year for the bank. Our transformative banking acquisitions have
diversified our company, insulated us from capital markets volatility, and reduced funding
costs. Our bank provides us with much more than risk mitigation. It has enormous
potential to create value. We now are the fourteenth largest bank in the United States,
with 742 branches and 1,288 ATM locations across our banking footprint. Banking is the
second largest income producer for the company, generating $574 million in net income
in 2007 and returns on allocated capital of 22 percent. And we have scale positions in
some of the most attractive and resilient banking markets in the United States.
During 2007, we assembled a new senior management team to build a winning retail
and commercial bank in all of our markets in New York, New Jersey, Connecticut,
Louisiana, and Texas. The team is led by Lynn Pike as president of our banking division.
Lynn brings a wealth of banking experience to our company from her years at Bank of
America (and Wells Fargo and Fleet Boston before that) and a great eye for talent. Since
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