The ratings on Capital One Financial Corp. reflect Standard&Poor's Ratings Services' view of the company's strong franchise position in the U.S. card sector; enhanced geographic and asset diversification; strong and growing core deposit franchise; and improved credit risk profile. The ratings also reflect Capital One's weaker-than-peers' Standard&Poor's risk-adjusted capital ratio and concentration in credit cards. Capital One's concentration in credit cards (credit card lending represents close to 50% of total loans) elevates the credit risk profile given its unsecured nature, though the risk is appropriately priced in our opinion. Asset quality in the seasoned domestic card portfolio is showing steady signs of improvement, a trend we expect to continue--though at a slower pace--and then stabilize in
