Capital One 2007 Annual Report Download - page 13

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joining Capital One, Lynn has recruited an all-star management team from major
banks, including Mike Slocum (Wachovia) to run our commercial business and Mike
Azevedo (Wells Fargo) to run our bank operations.
In order to realize the bank’s value, our management team has been extraordinarily
focused on delivering a sure-footed integration and driving tangible near-term growth
opportunities. The integration of our banks is complex. We are bringing two banks
(Hibernia and North Fork) together with Capital One’s legacy operations. When the
integration is complete, we will become “one bank” with a consistent and compelling
customer experience across our footprint in all of our channels.
I am pleased to report that the integration is on track. We have completed the
Hibernia integration and have converted to the Capital One brand in Texas and
Louisiana. We have integrated our human resources, finance, and treasury functions
across the enterprise. Our national credit card and auto businesses now provide the
product and distribution infrastructure for the entire bank. We are making the tough
decisions and sound investments to make sure we meet our stringent integration
objectives. Following the integration, we can tap into growth opportunities in
commercial, small business, and retail. And we can leverage Capital One’s powerful
brand, massive customer reach, competitive consumer lending products, and strong
analytical capabilities to complement our bank’s already strong customer loyalty.
Despite the demands of the integration, and the challenging banking environment, our
banking division continued to deliver solid performance. Deposits, as we anticipated,
were roughly flat at $73 billion. Our loan portfolio remained strong, well-diversified,
and low risk, with net charge-offs of 20 basis points.
In addition, we are pursuing growth opportunities and driving innovation in the bank.
We are already seeing significant traffic flow into our branches from our national
customer base in Texas and Louisiana. After the North Fork Bank conversion, we intend
to pursue similar consumer and small business opportunities in the New York and New
Jersey markets. We are making it easier than ever to become a customer of our bank.
In 2007, we introduced SmartSwitch®, which enables our customers to reliably and
easily move their entire banking relationship from another bank to Capital One, including
the seamless transfer of electronic bill pay information. We also have one of the best
customer experiences in commercial banking, achieving some of the highest scores
in the industry for client loyalty. We are committed to the commercial business and it
continues to be a strong performer.
11
“In order
to realize the
bank’s value,
our management
team has been
extraordinarily
focused on
delivering a
sure-footed
integration
and driving
tangible near-
term growth
opportunities.”