Last August it was announced that Capital One would purchase HSBC Bank`s $30 billion American credit card portfolio for $2.6 billion in cash and stocks. Last Tuesday, May 1, the deal was finalized.
Orchard Bank credit cards, which used to be issued by HSBC, will now be distributed by Capital One. They will retain their Orchard Bank labeling, but instead of saying “Orchard Bank is distributed by HSBC Bank Nevada…” they will say “Orchard Bank is distributed by Capital One Bank (USA), N.A.”
Cardholders to Benefit
This sale is good news for HSBC credit card holders, who will now be customers of Capital One. Capital One is popular for many reasons, among them the fact that they offer great rewards programs and don`t charge foreign transaction fees on any of their cards.
Capital One spokesperson Tatiana Stead said by email, “Our history clearly demonstrates that our customers and communities will see numerous benefits from this acquisition.”
Cardholders who have credit cards with HSBC logos on them or the Orchard Bank name shouldn`t worry about how the transition will affect them. They will be contacted if anything in their terms and conditions is changing, and any new cards that might be issued will be mailed to them.
Capital One is determined to make a smooth and easy transition for all its new customers.
Plenty of Good News for Capital One
Capital One was excited about the finalization of the acquisition in the days leading up to it. Richard Fairbank, CEO of Capital One, said in a conference call on April 19 that “Our new products like Venture, Cash and Spark are winning in the marketplace. We expect the completion of the HSBC U.S. Card business acquisition will catapult us to a leading scale position in the private label partnership space.” In the most recent quarter, Capital One`s shares were up to $2.72 per share and they posted a profit of $1.4 billion.
HSBC Still in the Game
It`s important to note that HSBC is not going out of business – it is one of the world`s biggest banks and will continue to operate over 250 branches in the United States, as well as having a strong international presence. It simply sold its credit card portfolios to Capital One in order to streamline their business and “better align” their business strategies.
Funny Takes the Day
Capital One credit cards continue to be some of the most popular in the industry, not only because of their great rewards programs but because of their humorous marketing campaigns. They currently run a series of popular commercials for their Spark Business cards, and their advertisements feature celebrities Alec Baldwin and Jimmy Fallon. Baldwin is the representative of their Venture cards, while Fallon reps the Capital One Cash Rewards card.