Capital One 2010 Annual Report Download - page 4
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2
Our Credit Card business continues
to produce industry-leading returns
Capital One’s card business had an outstanding year. After two years at the billion-dollar mark, net income
nearly doubled, to $1.9 billion, in 2010. After-tax returns on managed loans were 3.4%, the highest in
the industry for the sixth straight year, with mid-pack credit losses.
By the end of 2010 we had implemented substantially all the requirements
of the CARD Act. Our adjustment was relatively smooth, primarily
because we did not rely on many of the practices it banned –
practices such as long 0% balance transfer teasers coupled with
aggressive penalty repricing. Our revenue margin is close to its
pre-recession, pre-CARD Act level, and our business model is
largely intact. Capital One is in an excellent position to gain market
share on the newly leveled playing field created by the CARD Act.
We launched several breakthrough cards in 2010. Venture Rewards and
Venture for Business provide double rewards on all purchases. Rewards
don’t expire, and cardholders can redeem miles to fly on any airline with no
blackout dates. Money ® Magazine called Venture the “Best Rewards Card if you aim
to rack up airline miles,” and its exceptional value has won praise from
Time ®, Newsweek ®, ABC News®, CBS News®, CNNMoney ®, and Consumer
Reports®. Consumer response to initial marketing campaigns has been
excellent. Aspire World MasterCard®, a similar product tailored
to the Canadian market, has also been a big hit.
The card business is opening significant new channels by
forming partnerships with leading retailers like Kohl’s® in the
United States and Hudson’s Bay Company® in Canada. We also
launched two co-branded cards, the Sony CardSM from Capital One
in the United States and the Delta SkyMiles® World MasterCard®
from Capital One in Canada. Our new partners greatly expand
our customer universe, and our partners benefit from many of Capital One’s great
strengths: our powerful brand; our award-winning customer service; and our proven skills in underwriting,
product innovation, and marketing.
Capital One has always worked hard to deliver high-quality customer service, but this year’s drive to do
even better for our cardholders produced significant enhancements. We’ve sharpened execution across the