Shortly after it purchased HSBC’s U.S. credit card holdings, Capital One stated that it would be making significant cuts to the newly acquired brand.
Trefis reports the company will layoff nearly 1,000 employees, as it seeks to reduce costs after the $31.3 billion purchase. Thanks to the acquisition, the firm now ranks as the third largest private label card provider in the industry. The source reports that many of the layoffs will be made at HSBC’s administrative, processing and business ops facility in California, thanks to the fact that there is an overlap with existing employees.
Capital One has seen the benefits of its aggressive purchasing and cost-cutting strategy when it comes to the total amount of revenue coming in. Bloomberg reports that net income increased 37 percent to total $1.4 billion, gaining $2.72 per share compared to a year earlier.
The firm’s CEO Richard Fairbank said that the recent purchases, which also included ING Groep NV’s online U.S. bank, were important to making the stock even more valuable.
“Distributing capital to shareholders through a meaningful dividend and share buybacks, consistent with our long-standing commitment to maintaining a strong and resilient capital base,” Fairbank said in the statement.Back To Blog