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Capital One to buy New Orleans bank
Virginia
Business
April
2005
The
question now for Capital One may be not “What’s
in your wallet?” but “What’s in your
bank?” The McLean-based financial services company
announced in early March that it plans to buy New Orleans-based
Hibernia Corp., the largest bank in Louisiana, in a
cash and stock deal worth $5.35 billion.
Capital
One, which is the largest private employer in the Richmond
area, announced in 2003 that it was interested in buying
a bank. The move is expected to lower Capital One’s
cost of funds and to provide it with a new distribution
system for its consumer products. Capital One is best
known as a credit-card issuer, with 48 million accounts
nationwide. The Hibernia deal will vault the company
into the nation’s top 10 largest consumer lenders
and the top 20 financial institutions in terms of deposits.
Hibernia has $17.4 billion in deposits and $22 billion
in assets. It has 316 branches in Louisiana and Texas.
The banking company had revenue of $1.2 billion last
year, up 13 percent from 2003. Capital One had revenue
of $10.7 billion, an increase of 9 percent.
Capital One said that the merger should create cost
savings of $135 million by 2007. The deal is subject
to approval by Hibernia’s shareholders and regulatory
authorities. It is scheduled to close during the third
quarter of this year.
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