Capital One Makes Mark In New York

Capital One Financial Corp.’s move into retail banking, which it has been trumpeting with a blizzard of print and television advertisements, is a departure from tradition, analysts said.Credit card issuers such as Capital One typically accumulate a portfolio of customers and then big banks sweep in and acquire them. Capital One, which is best known for its credit card operations, proceeded by acquiring two retail banks and then opening some 360 branches in the spring.“Rather than being a monoline issuer that’s sold to a big bank, it’s one that’s transformed to a big bank,” a senior vice president with the investment bank Keefe, Bruyette & Woods, Robert Hughes, said.Capital One acquired the Long Island-based commercial bank North Fork Bancorp in 2006 for more than $13 billion, providing it with a built-in retail presence in the Northeast. The deal followed on the heels of Capital One’s $4.9 billion acquisition of a Southern consumer bank, Hibernia, in 2005. It finished rebranding all of the branches in the spring.Capital One’s strategy is not only a departure for a credit card company, it is a shift in the business model for the retail banks. “North Fork had always focused largely on small businesses, commercial real estate lending, and wasn’t historically involved in the consumer building business,” Mr. Hughes said. “It’s become more of a full-service and retail commercial bank now.”Capital One Financial Corp. collectively has $87.7 billion in deposits and $148 billion in managed loans outstanding as of March, according to a Capital One spokeswoman, Donna Don.To mark its foray into retail banking, Capital One is running a series of print and television advertisements that have generated some criticism. In one television spot, two men sit at a diner and one asks for the address of the nearest Capital One branch. As they peer at a mapping Web site on a laptop, red pushpins appear indicating nearby bank branches while larger-than-life versions crash into taxicabs and into the streets.In light of the terrorist attacks of September 11, 2001, and the recent construction crane collapses, “it’s perhaps not a good idea of having large flying objects raining down on Manhattan and causing destruction,” an adjunct professor of public relations and corporate communications at New York University, Robert Noltenmeier, said.“It works really well as visual impact, but less well as retention,” the executive editor of Brandweek, Barry Janoff, said, adding that the use of pushpins and the subsequent chaos was confusing.“If you’re somebody on the street, you might think it’s for Staples or OfficeMax or a movie like ‘Cloverfield,’ where they’re destroying parts of New York and the Statue of Liberty’s head is rolling down.”Some marketing experts said the message of the ads is unoriginal, that capitalizing on multiple branch locations didn’t set the bank apart.“They’re not offering any value of doing business with the bank other than they have many branches. Who cares?” the founder of the marketing consultancy Sinek Partners, Simon Sinek, said.“We design our ads to break through the clutter,” a Capital One spokeswoman, Lahne Mattas-Curry, wrote in an e-mail message. She added that the company conducted extensive consumer research throughout the advertising process and found that consumers “like the exaggerated, tongue-in-cheek humor that the ad employs.”

Capital One Makes Mark In New York

Capital One Makes Mark In New York

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