HSBC Holdings Plc, Europe’s largest bank, completed the sale of its U.S. credit card unit to Capital One Financial Corp. for a premium of $2.5 billion.
The lender received $31.3 billion of cash for the sale and customer balances of the U.S. card and consumer services division, the London-based bank said in a statement today. HSBC agreed to sell the business last August.
The purchase from HSBC with the acquisition of ING’s U.S. online bank will allow Capital One, which gets more than half its revenue from credit cards, to expand even as slowing U.S. growth caps loan demand. The deal also takes HSBC Chief Executive Officer Stuart Gulliver a step closer to focusing operations on faster-growing markets and U.K. consumer banking.
“The consideration and premium are subject to an adjustment based on final closing balances,” HSBC said in the statement. HSBC forecast a $2.6 billion premium in August as loan balances were higher.
While HSBC Finance Corp. will cease issuing credit cards, HSBC Bank U.S.A. will continue to do so, the lender said. HSBC is selling part of the HSBC Bank U.S.A. credit card business and its upstate New York branch network to First Niagara Financial Group Inc., the bank said.
-- Editors: Jon Menon, Keith Campbell