The ratings on Capital One Financial Corp. are based on the Falls Church, Va.-based company's solid performance as an independent entity since its 1994 spin-off from the credit card division of Signet Banking Corp. The ratings also reflect the risks inherent in the significant dependence on a single business line and heavy reliance on wholesale-sourced funding. Given the intense competitive pressures in the industry and market saturation, at least at the higher end of the credit spectrum, the company has followed an opportunistic strategy in attracting customers and growing loans. As a result, Capital One has been investing heavily in research and development of new products and in building a now sizable database, which is used to mass customize new
