Capital One Financial Corp. (COF), the worst performer among 24 U.S. lenders in the KBW Bank Index this year, said it would boost its dividend sixfold after submitting its capital plan to the Federal Reserve.
The payout for the first quarter will increase to 30 cents from 5 cents, the McLean, Virginia-based company said today in a statement. After last year’s stress test, Capital One said it would raise $1.25 billion through the sale of its own stock to help fund the purchase of HSBC Holdings Plc’s U.S. credit-card portfolio.
Chief Executive Officer Richard Fairbank, 62, said in January that he expects a “meaningful” dividend increase this year and that the lender initially won’t seek to repurchase shares.
Fairbank has spent more than $28 billion on acquisitions since 2005, including last year’s HSBC deal and the $9.1 billion purchase of ING Groep NV (INGA)’s online U.S. bank, which helped boost deposits by more than $80 billion.
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