The ratings on Capital One Financial Corp. reflect the McLean, Va.-based company's product mix, which, while broad, focuses on higher credit-risk consumer lending, particularly credit cards; an important reliance on wholesale-sourced funding, although this aspect of the funding profile has improved; and an always-competitive operating environment. We also consider the advantages afforded by Capital One's bank franchise, a strengthening corporate governance infrastructure, historically strong capital and liquidity, and a lower-risk, long-term strategy. Capital One has broadened its product menu beyond domestic consumer credit card lending and expanded its product offerings to include overseas credit cards, auto financing, small business lending, residential mortgage lending, home equity lending, and installment lending. In addition, Capital One's acquisition of North Fork Bancorp transformed the
