Capital One Nabs HSBC Credit Card Biz

Capital One Financial

, one of the largest U.S. credit issuers, will pay $2.6 billion to acquire HSBC's

U.S. credit card business. The move comes as part of plans by HSBC, Europe's largest bank, to raise cash. The company recently announced it will trim its workforce by 30,000 over the next two years to rein in costs and the bank had previously said it will sell half its U.S. branches for $1 billion and shutter its Polish branches. HSBC also announced asset sales in Russia. The deal with Capital One is expected to close by the second quarter of 2012. Virginia-based Capital One said it expects the deal to add to earnings in 2013. The company will add $30 billion in credit card loans by acquiring the HSBC credit card business, according to a statement issued by Capital One. Capital One expects its Tier 1 common ratio to be in the mid-9 percent range following the HSBC deal, it said in the statement. Capital One expects to realize cost synergies of approximately $350 million and incur restructuring costs of approximately $420 million, the company said. Morgan Stanley

advised Capital One on the transaction. JPMorgan

advised HSBC. In the statement, Capital One said it anticipates a capital raise of $1.25 billion, but added “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.”