Banking giant Capital One has announced plans to acquire Discover Financial Services for $35.3bn in a deal combining two of the United States’s biggest lenders and credit card issuers.

Capital One founder and CEO Richard Fairbank described the deal as an “incredible opportunity to bring together two exceptional companies”.

Discover CEO Michael Rhodes said the acquisition would bring “together two strong brands with enhanced ability to accelerate growth” and that it maximises value for their shareholders.

Capital One, the 12th largest US bank with more than $470bn in assets, would become the biggest US credit card company by loan volume under the acquisition.

Discover, the smallest of the four major US-based credit card companies, boasts a network of some 305 million cardholders – nearly triple Capital One’s existing customer base.

Credit cards have been a lucrative business for US issuers, with Americans’ card balances rising to a record $1.13 trillion in the fourth quarter of 2023, according to the New York Federal Reserve.

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