Having targeted the retail banking market for some time, Capital One said that the acquisition of Hibernia would aid its diversification and create growth opportunities. The group expects to be able to compete more effectively in the credit card business but also lower its cost of borrowing and increase deposits.
The deal values Hibernia at $33 per share and will see the bank become a subsidiary of Capital One. Capital One said that the combined company would be one of the top 10 largest consumer lenders in the US.
As a financial holding company with operations in Louisiana and Texas, Hibernia provides a wide array of financial products and services through its bank and non-bank subsidiaries, including a full range of deposit products, private and international banking, investment banking and insurance.
Hibernia is the largest depository institution in Louisiana and has 207 current locations throughout Louisiana and 109 locations in Texas, including the high-growth areas of Houston and Dallas-Fort Worth.
This acquisition is a natural extension of the diversification strategy that we have been pursuing for some time, stated Richard Fairbank, the chief executive of Capital One. Hibernia’s leading market share in Louisiana and its promising Texas branch expansion creates not only a solid growth platform as we continue to expand, but also an additional source of lower cost funding.
