Regulator Approves Capital One Purchase Of HSBC Credit Card Portfolio
March 09 2012 - 3:29PM
Dow Jones News
A U.S. banking regulator said Friday it approved Capital One
Financial Corp.'s (COF) $2.6 billion purchase of the U.S.
credit-card business of HSBC Holdings PLC (HBC).
The deal was approved by the Office of the Comptroller of the
Currency, which regulates national banks. After the deal Capital
One, based in McLean, Va., would remain the fourth-largest U.S.
credit-card issuer.
The deal includes about $30 billion of credit-card loans, prime
and subprime, as well as so-called private-label credit cards that
banks issue in the name of others, including retailers. It will
make Capital One the third-largest issuer of private-label credit
cards; it ranks sixth now, and General Electric Co. is No. 1.
Once the deal closes, Capital One would issue credit cards for
General Motors Co., the AFL-CIO, Saks Inc., Neiman Marcus Inc. and
Best Buy Co., among others.
The move comes after the Federal Reserve Board voted last month
to approve Capital One's plan to buy ING Groep NV's U.S.
online-banking business. That deal will make Capital One the
nation's fifth-largest bank based on deposit size and bolsters
Capital One's transformation from a credit-card lender into a large
national bank.
The OCC said it reviewed numerous complaints that Capital One
had not done enough to serve the interests of low-income
communities. It rejected those arguments, saying that Capital One
has met community needs "through community development lending,
qualified investments, and community development services."
-By Alan Zibel, Dow Jones Newswires; 202-862-9263;
alan.zibel@dowjones.com
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