Capital One Financial Corp. is looking to expand its domestic credit card business. It’s willing to spend an estimated $2.6 billion to do so. The company is buying the US credit arm of Britain’s HSBC as a means of expansion.
The announcement of this move pushed Capital One’s stock up 87 cents. Adding HSBC will bring the unit’s estimated $30 billion portfolio to Capital One. This includes $29.6 billion in gross customer loan balances. HSBC sold this segment of their business in order to focus more on their international interests. Capital One is expecting a boost in its earnings for 2013 and an increase in capital with the purchase.
Card holders will not likely see any changes in their agreements with either company. They should be able to use their cards in the same manner as they had previously. Internally for HSBC, it is still business as usual as well. All of HSBC’s employees will be offered positions with Capital One.