HSBC (HSBA.L) is to sell its US card and retail services business to Capital One in a deal worth $32.7 billion (£20.1 billion).

The deal represents a premium of 8.75 per cent to gross customer loan balances and will result in a post-tax gain of $2.4 billion.

The sale of the US credit card business comes after announcing a strategic review of the business.

Stuart Gulliver, group chief executive of HSBC, said the deal was in line with its strategy on focusing the US business on the international needs of customers.

He said, 'Although dilutive in the short term, this transaction will reduce group risk-weighted assets by up to $40 billion which, together with an estimated post-tax gain on sale of $2.4 billion, will allow capital to be redeployed over time.

'HSBC is pleased to be working with Capital One on this transaction, given its strong commitment to maintaining relationships with HSBC's customers, as well as its credit card and retail merchant partners.

'All our employees will be offered the opportunity to join Capital One and I would like to take this opportunity to thank the management team and employees for their dedication and wish them every success for the future.'

HSBC recently sold 195 branches in upstate New York to First Niagara Bank, which it claimed was part of its approach towards an international focused business in the US.

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