Capital One to buy ING U.S. online bank: report

Features Reuters

By Joe Rauch

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CHARLOTTE, North Carolina (Reuters) - Capital One Financial Corp <COF.N> has won the bidding for ING Groep NV's <ING.AS> U.S. online banking operations, the Wall Street Journal reported on Thursday.

The McLean, Virginia-based consumer finance company, best known for its credit card unit, will pay $6.2 billion in cash and $2.8 billion in stock for the division, the Journal reported, citing anonymous sources.

ING, a Dutch banking and insurance conglomerate in the middle of a breakup, will receive a 10 percent stake in Capital One, the Journal said, citing sources.

Capital One will raise $2 billion in new capital as part of the deal, which is expected to close later this year, the Journal reported.

Neither ING nor Capital One was immediately available for comment.

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The end of the bidding process concludes a two-year saga for ING Groep, while it continues Capital One's transformation from a pre-crisis, credit card-focused lender into one of the top 10 U.S. banks by deposits.

When ING and the European Commission agreed on a restructuring plan in late 2009, the most surprising part of the order for analysts was the mandate that ING sell its U.S. online banking operations.

The U.S. unit was widely held as the crown jewel of ING's Internet banking franchise, and senior ING management made it abundantly clear from day one how loathe they were to lose the business. They also said they planned to stretch the sale of ING Direct USA as long as they could.

When ING appealed its restructuring order in early 2010, seeking to have its penalties lessened, it was seen primarily as an attempt to get out of the U.S. online sale.

According to SNL Financial, ING Direct USA is the country's 20th-largest bank. Adding its assets would bump Capital One up two places in the rankings to make it the seventh-largest bank in the country by assets.

(Reporting by Joe Rauch; Additional reporting by Ben Berkowitz in New York, editing by Gerald E. McCormick, Dave Zimmerman)