The ratings on Capital One Financial Corp. reflect Standard&Poor's Ratings Services' view of the company's strong franchise position in U.S. cards: improved diversification of earnings, assets, and funding; and appropriate liquidity for the current environment. Ratings limitations in our view include higher credit risk consumer asset classes, concentration in credit cards, and industry reform legislation risk. We consider that Capital One's concentration in credit cards (credit card lending represents about 39% of managed loans) heightens credit risk, although its important market position benefits the business profile. We expect Capital One's earnings and capital to be significantly weakened by mounting credit losses in the next two years as per our current stress assumptions. This would suggest common equity capital
