AmEx Is a Bank, But Won't Act Like One

Capital One, headquartered in McLean, Va., expanded beyond its credit card roots into banking and mortgages beginning in 2005 when it bought Hibernia and then North Fork Bancorp the following year. Along with North Fork came its large Alt-A lender, GreenPoint Mortgage, which Capital One ended up shutting down last summer as the credit crisis intensified and took a big charge for it.

Valentin rates Capital One at underperform, the equivalent of a sell, based on a pessimistic outlook for consumer credit, larger loan loss provisioning and its own funding issues over LIBOR/prime rate spreads.

Yet on a positive note, Capital One's "strong capital levels and liquidity imply that the company will muscle its way through," he wrote in an Oct. 17 note. "The presence of a deposit franchise alleviates funding pressures faced by many peers and serves as a platform for distressed and opportunistic acquisitions."

Discover Financial Services (DFS Quote) also has a "vibrant deposit business," Maurer says. "They're in a very different situation. At the core this was about long-term funding stability, which is something that Discover has."

Indeed, CEO David Nelms said, during a Merrill Lynch financial services conference on Tuesday that the firm was "unlikely" to seek bank holding company status since most of the firm's activities, including 75% of its assets and securitizations already take place, in its regulated bank subsidiary.

According to its Web site, Discover has two banking affiliates in the U.S. -- Discover Bank and Bank of New Castle.

Discover Bank offers a variety of products, including credit card loans, home loans, personal loans and student loans as well as checking accounts, certificates of deposit and money market accounts, the Web site says.