HSBC Holdings Plc today said that it has agreed to sell its US credit card and retail services unit to US-based Capital One Financial Corp, for about $2.6 billion (£1.5 billion).
"This transaction continues the execution of the strategy we announced at our investor day ...... to focus our US business on the international needs of customers in commercial banking, global banking & markets," said HSBC's chief executive, Stuart Gulliver in a statement.
The sale comes after the London-based banking giant early this month signed a deal to sell nearly half of its US retail banking network to First Niagara Financial Group Inc, for about $1 billion in cash. (See: HSBC to sell 195 US retail banking network to First Niagara for $1 billion)
The deal is Capital One's second acquisition in recent months after it agreed in June to buy ING's US online bank for $9 billion in a cash and stock deal.
HSBC acquired its US credit card business in 2003 when it purchased mortgage-lender Household International for $15.5 billion.
HSBC's domestic credit card business includes approximately a $30-billion credit card portfolio and ongoing private label and co-branded partnerships as well as infrastructure.
The sale is at an 8.75-per cent premium to par value of all receivables. As of 30 June 2011, the premium value was at $2.59 billion.