Chillin' out till it needs to be funded
The real consumer banking wars have begun with the Bank of America / JPM Chase wars enjoined by the new #3 Capital One. Capital One’s $2.6 bln purchase of HSBC’s $31 bln card portfolio was approved by the office of the Comptroller of Currency. The earlier ING deal have made them the #5 bank (deposit taking institutions) and its brand has been high up while Wall Street takes its toll on money center banks., The new ease in borrowing for Capital One also means that its boutique of Private Label Cards from Neiman Marcus and AFL-CIO to Saks and Best buy would now yield it much better spreads i, and it can easily absorb the entire $31 bln HSBC portfolio with ING itself adding $81 bln of core deposits critical to geting it wholesale bank funding that transfgorms its earnings sheet into a much more consistent source of income.
Bank of America and JP Morgan will be formidable competitors to beat though and the #1 in private labels is still held by GE that recently bought Metlife’s online bank to get the same breadth of banking advantage for its strong brand.