HSBC to sell US credit card business

HSBC announced Wednesday that it is to sell its United States credit card and retail services business to US lender Capital One Financial Corp, as part of an overhaul to streamline its global operations.
The banking giant said it will sell the business in a deal worth around $32.7 billion, including a premium of about $2.6 billion, in an acquisition that is expected to close in the first half of next year.
The deal is subject to governmental and regulatory approval.
"The sale of the business and the recently announced disposal of 195 branches, primarily in upstate New York, are important steps in building an internationally focused business," HSBC said in a statement.
The gross assets of the US card business were $30.4 billion as at end of June, including $29.6 billion of customer loan balances.
The British-based lender said the United States remains a "key market" but said the credit card and retails services business was not aligned with its group strategy.
The sale comes after HSBC announced massive cost-cutting measures, including plans to save up to $3.5 billion by 2013 and to axe 30,000 jobs globally over the next two years as it shifts focus to fast-growing markets.
Group chief executive Stuart Gulliver said the sale will allow "capital to be redeployed over time", and reduce its risk-weighted assets by up to $40 billion while helping it to earn an estimated post-tax gain of $2.4 billion.