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Capital One's Fairbank Ramps Up 'Empire Building' With ING Deal

Capital One Financial Corp. (COF) CEO Richard D. Fairbank, who made the largest acquisition in American banking since 2008, built the Virginia-based credit card lender in one of the nation's largest consumer-finance companies.

Fairbank, CEO of Capital One, because it became an independent company in 1994, announced the acquisition of ING Direct USA for $ 9 billion yesterday. The agreement, following the purchase of 14.6 billion North Fork Bancorp in 2006, would Capital One Bank ranked sixth in deposits, up seventh.

"This is empire building at its best," said Michael Taiano, an analyst with Sandler O'Neill & Partners LP in New York, who added that his view of the improved agreement due to speculation Capital One will acquire other assets to go with the deposits of ING. "There is a certain status that comes from being a major bank."

The elevation of filing can help in McLean, Va.-based Capital One, which derives more than half of its sales of credit cards, to diversify its funding base and to acquire a portfolio of assets, analysts said. Capital One will pay $ 6.2 billion in cash and $ 2.8 billion in shares, giving ING 9.9 percent ownership stake, the companies said in statements.

"I suspect it would tie together with the acquisition of a portfolio," said Jonathan Hatcher, a credit strategist at Jefferies Group Inc. in New York who covers financial firms.

Fairbank Capital One transformed through a series of offers. The purchase of North Fork added more than $ 35 billion of deposits and catapulted the lender in the top 10 U.S. banks. He also directed a $ 4.9 billion acquisition of Hibernia Corp. in 2005 and 2008 agreed to a $ 525 million for Chevy Chase Bank.With the purchase of ING, Capital One has access to 7 million customers.

"Capital One is one of a handful of banks that break with the pack by building a broad customer base," Fairbank said in the conference call. "ING Direct offers a much more efficient for us to get national in scope and establish a strong national banking franchise. "

The acquisition may also enable the company to tap into what he calls a younger and more affluent. ING uses the Internet to attract customers and has only seven points the U.S., which are modeled on the cafes, according to its website.The ING Direct Cafes offer coffee, free Internet access and baristas who know about the offers from the bank.