Capital One Financial Corp. has taken the second step that had seemed inevitable.The McLean, Va., bank has agreed to buy the monoline U.S. credit card and private-label credit card businesses of HSBC for a $2.6 billion premium, according to press releases issued Wednesday by Capital One and HSBC. That is an 8.75% premium for the roughly $30 billion card portfolio, the releases said.

Capital One had agreed in June to buy ING Group NV's U.S. online banking unit for $9 billion. Press reports had said Capital One also was pursuing the HSBC credit card business, which was known to be on the block. Though Capital One officials downplayed speculation that they had to do the second deal to justify the first, the announcement Wednesday was not a shocker.

The sale includes HSBC's MasterCard, Visa, private-label and other credit card operations. It excludes HSBC Bank USA's $1.1 billion credit card program; HSBC said its U.S. unit will continue to offer credit cards to its customers.

"The acquisition of HSBC's domestic credit card business is an attractive strategic and financial opportunity in a business we know well," Richard D. Fairbank, chairman and chief executive of Capital One, said in the release. "Adding the HSBC card business to our own will enhance our credit card franchise and accelerate our achievement of a leadership position in retail card partnerships.

Capital One said a $1.25 billion capital raise would be necessary. It is sure to draw scrutiny because of Capital One's announcement last month that it would conduct a $2 billion capital raise in connection with the ING deal.Capital One said it expects to complete the HSBC acquisition in the second quarter and that its Tier 1 common ratio to be in the "mid-9% range" at the end of that quarter.

"The ultimate amount and timing of the capital raise will depend upon the company's capital accretion trajectory, the timing and magnitude of expected balance sheet repositioning, other balance sheet management actions and the actual timing of completing the pending acquisitions of ING Direct and the HSBC domestic credit card business."

Under the agreement, Capital One may pay in cash, or with a combination of cash and common stock, but the maximum value of the stock portion would be $750 million, the HSBC release said. Capital One said that would equal $39.23 per share, the average of its closing prices on Monday and Tuesday.

HSBC said that the businesses it is selling produced $600 billion of profits after tax at June 30 and that they had gross assets of $30.4 billion. HSBC estimates it will earn a post-tax gain of $2.4 billion.

Regulatory approvals are required, and either side may back out of the deal if it has not closed by May 10.

All of the HSBC unit's employees will be offered jobs at Capital One, the HSBC release said.

"This transaction continues the execution of the strategy we announced at our investor day on May 11 to focus our US business on the international needs of customers in Commercial Banking, Global Banking & Markets, Retail Banking and Wealth Management and onshore Global Private Banking," Stuart Gulliver, HSBC Group chief executive, said in a new release.

"Although dilutive in the short term, this transaction will reduce Group risk-weighted assets by up to $40 billion, which … will allow capital to be redeployed over time."

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