NEW YORK (CNN/Money) - And then there was one.

In the wake of a slew of high-profile credit card company mergers with large banks, all eyes are now on Capital One (Research), the last major holdout.

Metris (Research) announced Thursday that the company will merge with HSBC Holding's credit card unit HSBC Finance Corp. in a $1.59 billion deal. In June of this year, Bank of America Corp. (Research) agreed to buy MBNA Corp. (Research) for $35 billion, and Washington Mutual Inc. (Research) agreed to buy Providian Financial Corp (Research). for $6.45 billion.

While American Express (Research) is the largest credit-card issuer in the country, Capital One is the more likely acquisition candidate, although Wall Street isn't placing any bets that the company will put itself up for sale.

"My view is that they have no desire to sell," said Chris Brendler, analyst at Legg Mason Wood Walker. "They've been prescient and saw that the mono-line wasn't going to be viable for the long term."

Capital One was early to the diversification game, entering the auto finance and home lending arena. In 2005 alone, the company bought small auto-financing firm Onyx Acceptance, then purchased two home-equity lenders, HFS Group and eSmartloan . But its most recent purchase of New Orleans-based bank Hibernia for $5.3 billion in cash and stock in March truly stood out, giving Capital One an advantage over then stand-alone competitors such as MBNA.

The deal opened up about $13 billion in low-cost deposits for the company -- a cheap source of funds Capital One can use to support its lending operations. Pure-play credit card companies have in recent days struggled to compete with large banks that had a distinct funding advantage.

In this challenging environment, Capital One's focus on diversifying its business has already helped its growth. In its second-quarter earnings report, Capital One reported that net income from its auto finance business climbed 82 percent year-over year while net income from U.S. card business gained only about 12 percent.

Analysts said that Capital One will stand to benefit from adopting more consumer finance services and will likely stay in the role of acquirer for the near-term.

"In the end, there's a high likelihood that in ten years, Capital One will look more like a thrift," said Ed Groshans, specialty finance analyst at Fox-Pitt Kelton. "I'd be surprised if I don't hear them make another bank acquisition by late 2006 in hot markets such as Florida or Texas."

Legg Mason Wood Walker's Brendler was a little more cautious on the timetable for acquisition, saying that the company might wait for the mortgage lending business to slow down in order to buy a banking franchise at a cheaper price.

He added that Capital One may look to expand into student loans and focus on its auto lending operations and Hibernia integration before looking to make any other deals in the banking industry.

That's not to say that banks wouldn't consider Capital One as a takeover target if the price was right. Megan Bramlette, associate at Auriemma Consulting Group, said banks have lagged mono-line credit card companies in terms of customer service. And Capital One's marketing capabilities are definitely an advantage for banks aiming to enter or enhance their credit card operations.

Wachovia (Research) has already been bandied about as a possible acquirer given its desire to build its credit card business. Foreign banks are even more of a possibility, analysts said. While HSBC's acquisition of Metris would make it unlikely to make an offer, analysts said European banks such as Barclays and Royal Bank of Scotland have demonstrated interest in expanding their U.S. credit card base.

But Capital One could hold out for some time, said David Hendler, senior analyst at CreditSights, an independent securities research firm.

"The end game is to sell out but they may want to do it at a higher valuation," Hendler said. "The clock is sort of ticking on them but the company isn't feeling pressured to do something."

And banks are wary of putting out an offer given the company's steep valuation. Fox-Pitt Kelton's Groshans estimates that a bank would have to pay in excess of $100 a share for the company, which recently traded at about $83 a share.

"With that premium and given their size, its not clear that there would be a plethora of demand to buy something that large," Groshans said.

A Capital One representative couldn't be reached for comment.

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For more on Metris' deal with HSBC, click here

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