Taking a giant step into diversification, Capital One Financial Corp. is entering the consumer deposit business with the acquisition of a $425 million portfolio from J.C. Penney National Bank.

The ninth-largest credit card specialist said Tuesday that the J.C. Penney accounts will enable it to expand its funding resources and widen its product offerings.

"What we hope to bring to the business is an understanding of how to tailor a product to individual consumers," said Dave Willey, senior vice president and treasurer of Capital One.

By branching into deposits, Capital One appears to be pursuing a strategy that other monoline card issuers have embraced. Advanta Corp., No. 8 in the card world, established a similar bank for the purpose of capturing a larger chunk of the consumer retail business, and MBNA America, the No. 2 card company, also offers a variety of consumer banking products.

"The monolines are not so mono anymore," said Michael Auriemma, president of Auriemma Consulting Group Inc. of Westbury, N.Y.

Bankers should be concerned about this encroachment on their turf, Mr. Auriemma and other credit card experts said. Advanta and MBNA have been marketing a variety of financial services to consumers for several years. And if Capital One and its peers are as successful in selling retail products as they have been in credit card marketing, bankers will have new reasons to fear them.

Capital One, a Falls Church, Va.-based company that generally keeps strategic plans close to the chest, is best known for its plethora of card offerings and its data base marketing expertise.

J.C. Penney's accounts will provide Capital One with new marketing fodder for its $12.6 billion card portfolio.

"It's a very wise move for them to diversify, given what's going on with chargeoffs and delinquencies in the industry," said Frances M. Dale, president of Entandem, a consulting firm in Sterling, Va.

Conversely, J.C. Penney, the department store and catalogue retailer, is contracting to focus on its core businesses. The $425 million portfolio sold to Capital One-primarily made up of certificates of deposit-is the last piece of business of the company's bank.

Earlier this year, J.C. Penney National Bank negotiated deals to sell its credit card portfolio to Alliance Data Systems Corp. of Dallas and its branch network to First National Bank of Wyoming, Del. Terms of the deal with Capital One were not disclosed.

Mr. Willey of Capital One said his company plans to make use of the new portfolio in a variety of ways. The deposit base will allow the bank to study CD renewal rates, he said, and will also help gauge consumer interest in different financial offerings.

The J.C. Penney portfolio "gives us a critical mass to test and to jump- start our efforts to diversify," said Mr. Willey.

Mr. Willey said Capital One is planning to test the waters before diving into a deep marketing effort that involves the new accounts.

The strategy, he said, "is about figuring out what is appealing to different audiences. What that means in the deposit business we don't know yet."

Analysts said the acquisition is in line with what executives at Capital One have been saying about expanding the company's products and applying its data-mining skills to other financial offerings.

Most banks are having trouble attracting deposits, which generally are marketed through branch networks. If the monolines discover new ways to make deposits appealing to consumers, "it will be a real breakthrough," said Michael L. Granger, an analyst at Fox-Pitt Kelton.

Mr. Granger said he expects Capital One to solicit customers via direct mail, the same method that has successfully fueled its credit card engine.

About a year ago, Capital One established a thrift primarily to house the deposits associated with its secured card portfolio.

Now the thrift is seen as a vehicle for the company to launch other retail products.

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