Capital One Financial Corp. (COF) plans to offer $1.25 billion
of its common stock to help fund its acquisition of HSBC Holdings
PLC's (HBC, 0005.HK, HSBA.LN) U.S. credit-card operations.
Capital One is buying HSBC's U.S. credit-card business, which
includes about $30 billion in loans, for $2.6 billion. The deal
would make Capital One one of the largest issuer of private-label
credit cards.
The company, which transformed itself from a credit-card lender
to a bank just before the financial crisis, has benefited along
with many of its peers in recent months as its credit quality
improves. A stronger portfolio helped drive Capital One's profits
higher earlier in the year, though Capital One's fourth-quarter
profit fell a surprisinig 42% as it reported higher provisions for
losses on loans.
Capital One completed its acquisition of ING Direct USA from ING
Groep NV (ING, INGA.AE) last month in a deal valued at $9
billion.
Shares slid 1% to $51.80 in after-hours trading. The stock is up
24% so far this year.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com