Capital One 2012 Annual Report Download - page 21

Acquisitions in 2012
ING Direct
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, fsb 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 Financial Corporation
immediately prior to the merger. The merger and reduction in CONA’s capital surplus had no effect on Capital
One’s total capital.
HSBC—U.S. Credit Card Business
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,” which we sometimes refer 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.
Acquisitions in 2011
Hudson’s Bay Company—Credit Card Portfolio
On January 7, 2011, we acquired the existing credit card loan portfolio of Hudson’s Bay Company (“HBC”), one
of the largest retailers in Canada, from GE Capital Retail Finance. The acquisition included outstanding credit
card loan receivables with a fair value of approximately $1.4 billion and the transfer of approximately 400
employees directly involved in managing HBC’s loan portfolio. The acquisition and partnership with HBC
significantly expanded our credit card customer base in Canada, tripling the number of customer accounts, and
provided an additional distribution channel.
Kohl’s—Credit Card Portfolio
On April 1, 2011, we acquired the existing private-label credit card loan portfolio of Kohl’s Department Stores
(“Kohl’s”) from JPMorgan Chase & Co. pursuant to a partnership agreement we entered into in August 2010
with Kohl’s. The existing portfolio consisted of more than 20 million Kohl’s customer accounts with an
outstanding principal and interest balance of approximately $3.7 billion at acquisition. Under the terms of the
partnership agreement and in conjunction with the acquisition, we began issuing Kohl’s branded private-label
credit cards to new and existing Kohl’s customers on April 1, 2011.
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