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Capital One bids: A profitable HSBC Credit Cards unit and we are a bigger bank

CapitalOne APR Rate Increase

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I hope you can keep up with us and give us a pat now and then for the tough financials we decode to give you an accurate market wrenching analysis everytime.

HSBC Finance USA is the entity that was earlier Householders international. The $30 bln portfolio’s last 10Q shows that the Card Assets are under $10 bln for the quarterly report and profits of $148 mln EBIT were reported by the Card portfolio even as the overall HSBC finance arm reported a negligible $45 mln loss. In NII Card & Retail Services infact bills $940 mln of the total subsidiary NII of a slightly higher $4bln run rate for the year ( Cards: $3.5 bln)

The other Consumer portfolio is $ 73 bln in IFRS and a lower $70 bln in GAAP reporting with IFRS not allowing significant deferrals of cost unlike GAAP and also GAAP limiting recognition of income beyond what would be later settled by the cardholder on the outstanding balance. Income is recognised on the card portfolio in both forms based on the Eff Interest rate computed by the bank on Card deposits.

But I've never worked at Capital One...

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Capital One is shopping around for a quick HSBC Cards deal having already paid $ 9 bln for the Orange bank assets. The $82 bln in deposits would come good in holding and managing these card balances of $ 30 bln and significant grow cards from a strong position, HSBC not passing off bad international balances on this portfolio

The latest quarter’s loan impairment charges without which income is closer to $1.5 bln are still $349 mln for Cards and $ 2 bln for other Consumer loans. operating income from Cards is $1.8 bln and the larger Consumer loans $1.2 bln before impairment charges

the lobby at capitalone

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One comment on “Capital One bids: A profitable HSBC Credit Cards unit and we are a bigger bank

  1. Your position on bigger bank conforms to that of other authors I encountered, which makes me wonder whether this consencus in pulic opinion signifies the beginning of a new way of thinking. Thanks for the wonderful article it has really helped me. Well put zyakaira.


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This entry was posted on August 9, 2011 by in Banking, Dealbook, Retail Lifestyle, US and tagged , , , , , , , .


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