HSBC will sell its US credit card and private label credit card business comprising gross customer loan balances, certain real estate and other assets and liabilities to Capital One Financial Corporation. All employees will be given the opportunity to work for Capital One. HSBC has estimated its post-tax gain on the sale to be US$2.4bn based on 30 June 2011 figures.
The unaudited after tax profit of the business was US$600 million with assets of US$30.4bn, including US$29.6bn of gross customer loan balances. The sale does not include HSBC Bank USA’s US$1.1bn credit card programme. HSBC Bank USA will continue to offer credit cards to its customers.
The sale is part of HSBC’s refocus on global and premium customers, business banking and wealth management. The bank has already announced the sale of 195 branches in New York State.