Capital One to Buy ING Direct

Capital One Bank announced a $9 billion deal Thursday to acquire the online bank ING Direct, accelerating the firm’s transformation from a credit card lender to a mainstream consumer bank.

The acquisition catapults Capital One from being the eighth-largest US bank measured by deposits to the fifth, just below Citigroup. It also makes Capital One the country’s largest online bank, putting it at the forefront of an industry evolution that targets younger customers.

The deal allows Capital One to expand at a time when consumers are reluctant to take on new debt, said Matt McCormick, an analyst at Bahl & Gaynor Investment Counsel. Banks traditionally grow by making more loans, McCormick said. “The other way to grow is through acquisitions.”

Its acquisition is one of Capital One’s largest. With the deal, the company’s online banking business will more than triple, to $109 billion, with the addition of ING’s $80 billion in deposits.

Capital One is also spotlighting the desirability of ING’s 7 million customers, many of whom are younger and wealthier than its own. Sixty-nine percent of ING’s customers are 47 or younger, 10 percent more than Capital One’s.

Capital One, which sold its home-loan origination unit in 2007, is also reentering the mortgage market with this acquisition. ING Direct has about $41 billion in mortgage loans.

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Park Sae-jin swatchsjp@ajunews.com