HSBC closer to selling US credit card portfolio

HSBC Holdings has moved a step closer to the sale of its $30 billion (Dh110.15 billion) US credit card business, the bank said Tuesday, confirming talks with an unnamed buyer that reports said was cards specialist bank Capital One . Such a deal would mark the second time Capital One has swooped for unwanted US assets from a retreating European bank. The McLean, Virginia-based firm said in June it was buying ING\'s US online bank for $9 billion in cash and stock. HSBC said in May it was looking to sell its US card arm, which has about $31 billion of loans, as part of a radical overhaul and $3.5 billion cost-cutting plan under new chief executive Stuart Gulliver. The Wall Street Journal said Capital One was in advanced talks to buy the portfolio from HSBC. An HSBC spokesman declined to comment on who the bank was in talks with. Reuters reported a month ago that Capital One and Wells Fargo were interested in buying the portfolio. \"These discussions are ongoing and no decision has yet been made to proceed with any transaction,\" HSBC said in a statement yesterday. Gulliver said last week the bank was making progress in the planned sale. Profitability review HSBC, Europe\'s biggest bank, last week said it will shed nearly half of its underperforming U.S. branch network, selling 195 branches to First Niagara for $1 billion and closing 13 more. HSBC has been criticised for spreading itself too widely, gathering roughly 95 million customers across 87 markets, and Gulliver is aiming to put focus back on profitability. Bankers have called HSBC\'s US cards a tough sale because not many buyers remain for such large credit card portfolios since the financial crisis. Regulatory pressure A regulatory crackdown has made it harder to turn a profit, and industry observers have said it could be difficult for HSBC to get the premium it wants for the value of the business on its books. By 0815 GMT HSBC\'s London-listed shares were down 3.1 per cent at 521.8 pence, their lowest level for two years, in line with a weak European bank sector after a sell-off by US rivals on Monday and fears the Eurozone debt crisis will spread. Capital One spent much of the past decade transforming from a speciality credit card lender that mainly funded itself in the bond market, into a bank that relies heavily on deposits. Now, facing weakened loan demand after the financial crisis, the bank is again looking for deals to expand its business.