The man from over here doing rather well over there

Business Profile: Nigel Morris says Capital One will soon be in the top three UK credit card companies

Nigel Morris is feeling less hirsute than usual after being forced to shave his beard off as a result of a domestic accident. "I picked up my razor to trim it and my little boy had taken off the safety bar. Instead of clipping it I shaved this great big stripe off. I tried to even it up by doing a stripe on the other side but it didn't work so it all had to go. But I'm going to grow it back over Christmas."

Mr Morris, a lean 46-year-old, is sitting in the somewhat spartan London offices of Capital One, the American credit card company that has targeted the UK as its next big growth market. Though the business is listed in the US and based in Virginia, it was founded by Mr Morris, an Essex-born Brit who ranks 145 in The Sunday Times rich list with a net worth of £229m. He is just ahead of JK Rowling and Madonna and though he draws no salary from Capital One, he cashed in $89m of share options last year and his remaining stake is worth $120m.

But despite his wealth he is remarkably unflashy. There is no glittering watch or expensive-looking designer suit and he seems just as happy talking about Tottenham Hotspur and 1980s music as interest rate margins or loan "delinquency rates" (US-speak for when borrowers fail to pay). And although he has lived in the US for nearly 20 years his speech remains that of a true Brit. "I just never picked the accent up," he says. "I don't know why."

Capital One is in a topical sector as its credit cards offer aggressive rates targeting specific demographic groups using state-of-the-art technology. In the US it competes head-to-head with Household International, the consumer finance business snapped up for £9bn last week by HSBC. But while Household has been portrayed as a ruthless loan-shark which charges high interest rates to so-called "sub-prime", less credit worthy, customers, Capital One claims to be different.

"Most of our market is 'super-prime' and our 'sub-prime' business in the UK would account for only 20-25 per cent of the total," he says.

So while Mr Morris does woo borrowers who fall off the radar of other lenders he is also targeting more affluent people who may be paying rates which are too high for those with good credit records.

"I set up Capital One with my partner, Rich Fairbank, in 1985 because back then the market was completely homogeneous. It was the same price and same service for everyday. Good customers were paying the same rates as everyone else while people with a blemish couldn't get a credit card at all."

It certainly seems to have worked. In 1988 Capital One had 1 million customers. By 1994 the number had risen to 5 million and now it is over 50 million. It has 6 per cent of the US credit card market and claims more customers than American Express.

The big target is now the UK where it has been battling with another US group, MBNA, to take on the big guns such as Barclaycard. "We entered the UK in 1996 because we thought people were paying to much for credit. The industry was dominated by the big banks and we are now taking them on. We charge half the typical 20 per cent rates (the standard rate is 11.5 per cent) and with no annual fee."

Capital One now has 3 million UK customers, putting it seventh in the UK credit card market with a share of 4 per cent. The UK operation is growing fast, at 30 per cent a year. "We could be in the top three in three to five years," Mr Morris claims. The business now has over 2,000 staff in the UK, mostly at a Nottingham facility opened by Prince Charles in 1997.

Mr Morris denies any sort of Household-style, strong-arm tactics or rip-off rates in its sub-prime business. "It's a 15-20 per cent interest rate and no annual fee," he explains. "We are careful with credit control with an average credit line of $3,000 against an industry average of $8,000."

Would Capital One ever seek a listing on the London market? "We've talked about a London listing but the European business isn't big enough yet. The UK business has been profitable for 18 months but our main goal is to make some money here after five years of investing. We want to build the brand."

Mr Morris was born in Billericay, the son of an army sergeant. This meant the young Morris was hauled around the country and the world, attending 11 different schools. After Lancaster Grammar School he went to North East London Polytechnic where he studied psychology. He did a bit of social work afterwards but gave it up to do an MBA at the London Business School. After a stint at Wharton Business School in the US he never came back and joined Strategic Planning Associates (now called Mercer Consulting) as a management consultant.

"The US just seemed to be where the action was," he explains. "I love the can-do spirit of America. Everyone thinks they can be Bill Gates. Everyone thinks they can change the world."

He formed Capital One in 1985, floated it in 1994 and the business has grown so quickly that it had net profits of $641m last year and $258m in the third quarter of this year.

"I still feel British," Mr Morris says. "I look for the English rugby games and still have the BBC News on my web favourites."

On his resolutely British accent, he says: "It has its advantages in America. They think you know the complete works of Shakespeare if you have a British accent."

He has some assets here, including a house in Kensington bought two years ago. "It's one of the best investments I've ever made," he says, eyes gleaming. But he still misses things like "a really good Indian meal and a couple of pints of Guinness".

His interests are simple. "I've got four children, aged 5 to 14, and I like to spend time with them because I'm not sure my dad spent enough time with me when I was growing up. I'm trying to bring them up as Spurs fans and take them to a game when they turn five. I still find American sports impenetrable."

His other main hobbies are collecting maps, including one of 15th century London, and coaching "soccer" as he calls it. "I don't have a lavish lifestyle," he says.

He's not sure he'll ever come back to his homeland. "I've always thought I'll be coming back in two or three years, but somehow it never happens."

NIGEL MORRIS CREDIT RATING

Age: 46

Pay: Waives his annual salary but cashed in $89m of share options last year. Capital One stake worth $120m, held in options.

Career history: A spell as a social worker before leaving to do an MBA at London Business School. Joined Strategic Planning Associates (now Mercer Management Consulting) in 1985. Moved to Signet Bank's credit card division in 1988. Co-founded Capital One in 1995.

Interests: family, sport, cartography, current affairs.