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 Signet Banking Corp. The ratings reflect risks inherent in a limited product menu, which, while broadening, encompasses high-risk loan types; heavy reliance on wholesale-sourced funding; and an always-competitive operating environment. Also considered are improving asset quality measures, a strengthening corporate governance infrastructure, historically strong capital and liquidity, and a lower-risk long-term strategy. Capital One is succeeding in broadening its product menu beyond domestic consumer credit card lending, and has expanded its product offerings to include overseas credit card lending, auto lending, small business, and installment lending. The predominant asset type, however, remains domestic credit card lending,
