Capital One extends banking holdings
In the past year we have seen US banking giant Bank of America extend its credit card empire with the purchase of MBNA. Now we see the opposite, as Capital One, one of the biggest credit-card companies, significant grows its commercial bank holdings with purchase of New York-based regional bank North Fork. The deal is set at $14.6 billion.
This is not the first bank purchase by Capital One, which last year bought regional bank Hibernia Bank, centered in Louisiana, in a $5 billion deal.
The though is that Capital One, the biggest credit-card issuer not linked to a major national bank, wants to hedge its bets. Credit card profits are reportedly down, and a bank like North Fork offers a less volatile source of income and of capital. Capital One is also increasingly in the business of auto loans, personal loans, and mortgages, something that a purchase of a strong retail bank will be a major plus in funding through deposits.
Capital One has shown meteoric growth, most of it organic. Its origins go back to 19888, but it achieved amazing growth in the 1990s and early 200s through aggressive television ad campaigns and equally aggressive direct mail campaigns. It is now the #4 credit card issuer in the US.
North Fork is itself the beneficiary of an acquisition. Last year it bought fellow New York region bank GreenPoint in a $6.3 billion deal. It is the #3 bank in the profitable New York City market.
9:33:59 PM 
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