July 2 (Bloomberg) -- Capital One Financial Corp.’s board authorized a plan to repurchase as much as $1 billion of the company’s stock if it completes the sale of its portfolio of Best Buy Co. private label and co-branded credit cards to Citigroup Inc.
If the sale closes, the Federal Reserve told Capital One it may buy back the shares through March 31, the McLean, Virginia-based lender said today in a statement. The company expects the sale to be completed in the third quarter, according to the statement.
Capital One, led by Chief Executive Officer Richard Fairbank, 62, agreed in February to sell the Best Buy credit-card business to New York-based Citigroup for an undisclosed price. After this year’s annual stress test by the Fed, Capital One said it would boost its dividend to 30 cents from 5 cents, according to a statement at the time.
The timing and size of the share buyback will depend on “closing of Capital One’s sale of the Best Buy portfolio, market conditions, Capital One’s capital position, and internal capital generation,” the company said today.
Capital One climbed 1.2 percent to $63.59 yesterday in New York. The shares have advanced 9.8 percent this year, compared with the 21 percent jump in the 24-company KBW Bank Index.
To contact the reporter on this story: Laura Marcinek in New York at email@example.com