Capital One Financial Corp. Chairman and Chief Executive Richard Fairbank says he believes the credit card business is headed for significant consolidation and that his company intends to be one of the industry's "endgame players."
The McLean, Va., company is already in the process of buying HSBC Finance Corp.'s $30 billion credit card portfolio, and Fairbank said at the Barclays Global Financial Services Conference in New York Wednesday that he continues to field inquiries from smaller lenders looking to exit the card business.
Credit card lending "is a very profitable business for a few endgame players, but it is a very difficult business if you don't have scale," Fairbank said.
Capital One is unlikely to make any major announcements, though, until controversy over another deal — its $3 billion purchase of ING Direct — subsides.
The ING deal has come under scrutiny from lawmakers and consumer groups who are concerned about the size of the combined bank and the Federal Reserve has responded by scheduling hearings on the deal in Washington, Chicago and San Francisco.
Fairbank said the rationale for the deal is a compelling one, arguing that it will benefit ING Direct's 7.5 million customers by giving them access to Capital One's broader array of products and services.
Still, he said he is not surprised that the deal has raised eyebrows because it is the first major bank acquisition announced since the passage of the Dodd-Frank Act last year.
"The Fed is very committed to maximum transparency," he said.
