The ratings on Capital One Financial Corp. are based on the McLean, Va.-based company's performance as an independent entity since its 1994 spin-off from the credit card division of Signet Banking Corp. The ratings reflect risks inherent in a limited product menu, which, while broadening, encompass high-risk loan types; heavy reliance on wholesale-sourced funding; an increasingly competitive operating environment; and increased regulatory risk. Also considered are improving asset quality measures, a strengthening corporate governance infrastructure, and a lower-risk long-term strategy. Capital One has succeeded in broadening its product menu beyond domestic credit card lending, and has expanded its product offerings to include overseas credit card lending, auto lending, and installment lending. The predominant asset type remains domestic credit card lending,
