ING Groep NV (ING, INGA.AE) decided to sell its U.S. online banking business to Capital One Financial Corp. (COF), according to people familiar with the matter.

The announcement of the deal, valued at $9 billion, will be soon. Capital One will pay $6.2 billion in cash and $2.8 billion in stock for ING Direct USA, which will give ING an about 10% ownership stake in the McLean, Va., bank, according to a person with direct knowledge of the matter.

Capital One will raise $2 billion in fresh capital before the deal closes, expected later this year, this person said.

Capital One is the ninth-largest bank in the U.S. by deposits, and adding ING Direct would make it No. 6, ahead of U.S. Bancorp (USB). Bank of America Corp. (BAC) is No. 1.

As Dow Jones previously reported, the bank has also made a complementary bid for HSBC Holdings PLC's (HBC, HSBA.LN 0005.HK) U.S. credit card business, according to people familiar with the matter. The bidding for HSBC's cards business is in the early stages. Capital One could fund the expanded card business with the ING deposits, allowing it to grow at a time when consumers are reluctant to take on new debt and the economy is sputtering.

ING Direct is one of the largest and most successful online deposit gatherers, with $82 billion of deposits and seven million customers that proved more loyal to the online bank than banking analysts and consultants had originally expected when internet banking emerged as a stand-alone banking strategy just over 10 years ago.

Capital One, meanwhile, has been transforming itself from a credit card lender to a bank to use more stable deposits to fund its loans, and created its own online bank. It since bought three traditional banks.

The company has been bidding for ING Direct along with General Electric Co. (GE), according to people familiar with the matter. But Capital One was more willing than the industrial conglomerate to take on mortgages and mortgage-backed securities that are part of the online bank, those people said.

Capital One isn't expected to keep the mortgage assets, but its willingness to take them on made its bid less complicated than GE's offer, according to people familiar with the matter.

ING, of Amsterdam, was ordered by the European Commission to sell the business by 2013 as a condition for government aid it had received during the financial crisis. The forced disposal is part of a wider restructuring plan.

-By Matthias Rieker, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com

--Anupreeta Das and Gina Chon contributed to this article.

Capital One Financial (NYSE:COF)
Historical Stock Chart
From Jun 2024 to Jul 2024 Click Here for more Capital One Financial Charts.
Capital One Financial (NYSE:COF)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more Capital One Financial Charts.