The outlook reflects Standard&Poor's concern about Capital One Financial Corp.'s increasing charge-off rates and elevated growth rates that have consistently approximated 60% in year-over-year comparisons throughout 2001. Concern regarding the strong growth reflects the masking effect and the generally negative impact on asset quality that such growth scenarios have as newly originated loans season. Capital One's coincident charge-off ratio remains the strongest of major credit card issuers. Twelve-month lagged charge-offs, however, are among the weakest of major issuers. Capital One has been changing its loan mix to include greater proportions of lower yielding and lower credit-risk prime and superprime loans. An increase in teaser rate outstandings along with the loan mix shift is reflected in steadily declining returns
