Capital One 2012 Annual Report Download - page 156

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Capital One Financial Corporation, a Delaware Corporation established in 1995 and headquartered in McLean,
Virginia, is a diversified financial services holding company with banking and non-banking subsidiaries. Capital
One Financial Corporation and its subsidiaries (the “Company”) offer a broad array of financial products and
services to consumers, small businesses and commercial clients through branches, the internet and other
distribution channels. As of December 31, 2012, our principal subsidiaries included:
• Capital One Bank (USA), National Association (“COBNA”), which currently offers credit and debit card
products, other lending products and deposit products; and
• Capital One, National Association (“CONA”), which offers a broad spectrum of banking products and
financial services to consumers, small businesses and commercial clients.
The Company and its subsidiaries are hereafter collectively referred to as “we”, “us” or “our.” COBNA and
CONA are hereafter collectively referred to as the “Banks.”
We also offer products outside of the United States principally through Capital One (Europe) plc (“COEP”), an
indirect subsidiary of COBNA organized and located in the United Kingdom (U.K.), and through a branch of
COBNA in Canada. COEP has authority, among other things, to provide credit card and installment loans.
Effective December 1, 2010, as a result of the transition of our U.K. operations to an Authorized Payment
Institution, we are no longer authorized to accept deposits in the U.K. Our branch of COBNA in Canada has the
authority to provide credit card loans.
Recent Acquisitions
On February 17, 2012, we completed the acquisition (the “ING Direct acquisition) of substantially all of the ING
Direct business in the United States (“ING Direct”) from ING Groep N.V., ING Bank N.V., ING Direct N.V. and
ING Direct Bancorp (collectively the “ING Direct Sellers”). The ING Direct acquisition resulted in the addition
of loans of $40.4 billion, other assets of $53.9 billion and deposits of $84.4 billion as of the acquisition date.
On October 17, 2012, the Office of the Comptroller of the Currency (“OCC”) approved, subject to several
conditions, CONA’s application to merge with ING Bank with CONA surviving the merger. Capital One
effected the merger on November 1, 2012. In addition, the OCC approved CONA’s companion application to
reduce capital surplus, which was necessary to manage excess capital levels that would result from the merger.
CONA effected the reduction in surplus through a return of capital to Capital One immediately prior to the
merger. The merger and reduction in CONA’s capital surplus had no effect on Capital One’s total capital.
On May 1, 2012, pursuant to the agreement with HSBC Finance Corporation, HSBC USA Inc. and HSBC Technology
and Services (USA) Inc. (collectively, “HSBC”), we closed the acquisition of substantially all of the assets and
assumed liabilities of HSBC’s credit card and private-label credit card business in the United States (other than the
HSBC Bank USA, National Association consumer credit card program and certain other retained assets and liabilities)
(the “2012 U.S. card acquisition,” also referred to as the “HSBC U.S. card acquisition”)). The 2012 U.S. card
acquisition included (i) the acquisition of HSBC’s U.S. credit card portfolio, (ii) its on-going private label and co-
branded partnerships, and (iii) other assets, including infrastructure and capabilities. At closing, we acquired
approximately 27 million new active accounts, approximately $27.8 billion in outstanding credit card receivables
designated as held for investment and approximately $327 million in other net assets.
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