Capital One to buy HSBC US credit card arm

[August 10, 2011]  MCLEAN, Va. (AP) -- Capital One Financial Corp. says it will buy the U.S. credit card arm of Britain's HSBC for a premium of about $2.6 billion as a way to expand its domestic credit card business.

HSBC said in May that it was exploring a possible sale of the unit.

Capital One said Wednesday that the deal should provide a significant boost to its 2013 operating earnings and help raise about $1.25 billion in capital.

The McLean, Va.-based bank says the acquisition will result in about $350 million in cost savings. It will also incur approximately $420 million in restructuring costs tied to the deal.

The acquisition is expected to close in the second quarter of 2012.

[Associated Press]

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