Capital One Financial (COF) has grown its commercial and industrial loans by double digits over the past year, but its chief executive says it is prepared to pull back if the battle for business clients becomes any more intense.

Speaking at the Goldman Sachs investor conference in New York on Wednesday, Richard Fairbank acknowledged competition is fierce in most areas of lending, but added that the C&I market that is most at risk of overheating. As Fairbanks sees it, there are too many deposit-rich banks chasing too few commercial loans, and he fears that combination is already leading to irrational pricing and weakening credit standards.

"All the banks are going to trample the C&I space, and it wouldn't surprise me if it's the first business to hit that inflection point where it's gotten overheated," Fairbank told investors and analysts. "We haven't gotten there yet but we're on the lookout for it."

Other CEOs have expressed similar concerns and have said they too would consider tapping the brakes rather than get into bidding wars with rival banks.

Fairbank said that the biggest threat is likely to come from smaller and regional banks that scaled back commercial real estate lending following the property bust and don't have credit cards or other types of loans to fall back on.

"They've sort of been painted into a corner," he said.

Fairbank added during a 40-minute question-and-answer session at the conference that, after years of using its capital to make high-profile acquisitions, Capital One's near-term plan is to distribute more capital to shareholders through dividend payments and stock buybacks.

Though he did not explicitly swear off more acquisitions, Fairbank said he's comfortable with Capital One's size and that its primary focus over the next year would be on successfully integrating its acquisitions of HSBC's credit card portfolio and online bank ING Direct, both of which it bought earlier this year. With capital generation expected to outpace asset growth, Fairbank added that that he expects to provide "meaningful" dividends to shareholders, though he declined to give a dollar figure.

"I would rather not artificially box ourselves in," he said.

Fairbank also said that the company would be "selective" in choosing retail partners for the private-label credit card portfolio it inherited in the HSBC deal and that it would be a "tough negotiator" when existing contracts come due.

Though the company is interested in growing that portfolio, Fairbank said he'd rather partner with fewer strong retailers than lots of mediocre ones.

"The partnership business is all about selectivity," he said.

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