Capital One Financial Corporation · NYSE:COF
Capital One Financial — Merger or Acquisition (August 2011)
9 slides from Capital One Financial's merger presentation, Aug 10, 2011
Slide 1: Acquisition of HSBC Domestic Card Business Investor Presentation
Exhibit 99.1 Acquisition of HSBC Domestic Card Business Investor Presentation August 10, 2011 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act giving Capital One’s expectations or predictions of future financial or business performance or conditions. Such forward- looking statements include, bu
Slide 3: Transaction Summary
Transaction Summary Receivables Purchased $29.6 billion Premium Offered 8.75% cash premium or $2.59 billion as of June 30, 2011 Expected Closing Second Quarter 2012 Capital Tier 1 common equity ratio expected to be in the mid-9 percent range at the end of the second quarter of 2012, including planne
Slide 4: The HSBC domestic credit card business is attractive
The HSBC domestic credit card business is attractive Profitable Premier retail Profitable Strong national-scale partnership through Great management card business franchise Recession team 4
Slide 5: The HSBC domestic credit card portfolio is comprised of three business segments
The HSBC domestic credit card portfolio is comprised of three business segments Card Portfolio Business Segments (~$30B) • Primarily MasterCard branded ($B as of 5/31/11) Bank Card • 10.3MM active accounts • Includes some run-off portfolios Bank Card $9.4 Retail Partnerships $12.7 • General Motors a
Slide 6: HSBC has built a premier partnership franchise
HSBC has built a premier partnership franchise 6
Slide 7: Acquiring the HSBC business significantly expands and enhances our Card franchise
Acquiring the HSBC domestic credit card business significantly expands and enhances our Card franchise U.S. Credit Card Outstandings U.S. Private Label Retail Card Q1 2011 Outstandings $B $B 2010 Year-End $35 $140 $129 $30 $30 $120 $27 $107 $100 $25 HSBC $80 $20 $73 HSBC $17 $68 Capital One $60 $15
Slide 8: HSBC's domestic credit card business remained profitable throughout the Great Recession
HSBC’s domestic credit card business remained profitable throughout the Great Recession ROA 6% 2007 – Q1 2011 HSBC Monthly Charge-Off Rate 5.1% 4.9% 5% 16% Capital One 3.9% 4% 3.4% 3.2% 3.0% 14% 3% HSBC 12% Total Book 2% 1.4% 1.4% 1.2% 1.0% 10% 1% 8% 0% Capital One Domestic Card 2007 2008 2009* 2010
Slide 9: We expect the acquisition to deliver compelling financial and strategic results
We expect the acquisition of HSBC’s domestic credit card business to deliver compelling financial and strategic results Attractive Deal Compelling Strategic Economics Value • High-teens GAAP and operating EPS • Expands and enhances card accretion in 2013 franchise • Return on invested capital greate
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