HSBC continues to discuss the potential sale of its U.S. credit card operations. Capital One is rumored to be a leading contender to purchase the card unit, which was originally centered on the Household International card portfolio acquired in 2003.
“These discussions are ongoing and no decision has yet been made to proceed with any transaction,” the London-based bank said in a filing to the Hong Kong stock exchange today. Capital One Financial Corp. (COF) is in advanced talks to purchase the credit-card portfolio, a person familiar with the discussions said yesterday.
The negotiations follow HSBC’s agreement on July 31 to sell almost half its U.S. outlets for about $1 billion amid a drop in the value of assets acquired when it bought a subprime lender in 2003.
The sale of the card unit is just one element of the U.S. restructuring for HSBC. It is also a potential element of a major growth initiative for Capital One.
HSBC agreed on July 31 to sell its upstate New York branch network to First Niagara Financial Group Inc. The price amounted to a 6.7 percent premium for the $15 billion of deposits along with 195 branches in New York and Connecticut that were sold, according to HSBC’s statement.
For Capital One, the transaction would be the second after it agreed in June to purchase ING Groep NV’s U.S. online bank for $9 billion. The ING deal, which McLean, Virginia-based Capital One said will be completed by late this year or early 2012, will add about $80 billion in deposits and 7 million customers.
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