HSBC sells US credit card unit to Capital One
HSBC has netted a $2.5bn (£1.5bn) premium from the sale of its US credit card and retail services business to Capital One.
The bank, which agreed the deal last August, said Capital One paid $31.3bn in cash for the assets, including an 8.75 per cent premium over the total loan balances.
HSBC has agreed to provide some services linked to the business to Capital One for up to two years, with the option to extend for a further year.
Europe’s biggest bank will continue to offer credit cards to American customers, though $400m of the $1.2bn programme will be sold to First Niagara Bank in the coming months.
HSBC put the capital-intensive assets up for sale last year as part of chief executive Stuart Gulliver’s radical cost-cutting plans.
The bank is axing thousands of UK jobs and selling off non-core assets around the world in a bid to cut £2.2bn from annual costs, shore up capital and improve its bottom line.
It sold its general insurance business to AXA and QBE for $914m last month, and is in talks to offload its Mauritius retail banking and wealth management units.