Sep 14, 2011 - sustain revenue and earnings growth; changes in interest rates and capital ... (e.g. Best Buy, Neiman Mar
Barclays Global Financial Services Conference Rich Fairbank Chairman and CEO
September 14, 2011
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Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act giving Capital One’s expectations or predictions of future financial or business performance or conditions. Such forward-looking statements include, but are not limited to, statements about the projected impact and benefits of the transactions involving Capital One, HSBC and ING Direct, including future financial and operating results, Capital One’s plans, objectives, expectations and intentions and other statements that are not historical facts. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made, and Capital One assumes no duty to update forwardlooking statements. In addition to factors previously disclosed in Capital One’s filings with the U.S. Securities and Exchange Commission and those identified elsewhere in this presentation, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the possibility that regulatory and other approvals and conditions to either of the transactions are not received or satisfied on a timely basis or at all; the possibility that modifications to the terms of either of the transactions may be required in order to obtain or satisfy such approvals or conditions; the possibility that Capital One will not receive third-party consents necessary to fully realize the anticipated benefits of the transactions; the possibility that Capital One may not fully realize the projected cost savings and other projected benefits of the transactions; changes in the anticipated timing for closing either of the transactions; difficulties and delays in integrating the businesses acquired in the transactions; business disruption during the pendency of or following the transactions; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; diversion of management time on issues related to the transactions; reputational risks and the reaction of customers and counterparties to the transactions; and changes in asset quality and credit risk as a result of the transactions. Annualized, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results.
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Capital One is emerging from the Great Recession as one of the nation’s strong banks
Profitable Businesses
Strong Balance Sheet
Advantaged Access to Assets
Relevant Banking Scale in Attractive Markets
Brand and Customer Base
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Our strong position enabled us to act on two compelling acquisition opportunities ING Direct
HSBC US Card
• Industry-leading direct banking franchise with national reach
• $9 billion bank card portfolio expands Capital One credit card franchise
• 7 million young, high-income, loyal customers
• $20 billion co-brand and partnerships portfolio and platform – 23 current partner relationships (e.g. Best Buy, Neiman Marcus, Saks Fifth Avenue, AFL-CIO) – Infrastructure and technology at scale – Accelerates building of Capital One partnerships business
• $80 billion of low cost, stable deposits • National banking reach with advantaged distribution
• 27MM new active accounts • Excellent fit with Capital One’s proven capabilities in credit card business
Accretive to long-term returns and capital generation 4
The planned acquisitions enhance our already strong position Complementary Acquisitions
• Resilient loans with strong margins • Direct channel deposits with competitive “all in” costs and flexible cost structure • Balanced loan-to-deposit ratio • Combined company in a stronger position to navigate economic/yield curve scenarios
Financial and Strategic Logic Remains Compelling
• Expect strong near-term financial performance – EPS accretion – IRR – Return on invested capital • Expect acquisitions to be accretive to long-term returns and capital generation • Expect to realize significant strategic upside 5
With these acquisitions, we are in an even stronger position to deliver significant value to customers and shareholders Advantaged access to both sides of the balance sheet
End-game positions with relevant scale •
National consumer assets
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National brand
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Digital leadership and scale
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Local banking in attractive markets
Sustainable economic advantages •
Credit risk underwriting
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Direct/digital distribution
Large and loyal customer franchise
Positioned at the forefront of where banking is going
• Growth potential (off a larger base) • Strong returns and capital generation • Strong balance sheet and financial resilience
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