Signet renames credit card subsidiary Capital One

October 12, 1994|By David Conn | David Conn,Sun Staff Writer

Signet Banking Corp. has changed the name of the credit card company it plans to spin off in a public offering and said it expects to begin the sale next month.

Instead of OakStone Financial Corp., the company will be called Capital One Financial Corp., Richmond, Va.-based Signet said yesterday.

"Capital One consistently outperformed a broad array of names in extensive consumer testing," Signet said in a statement.

The offering will begin some time after Signet releases its third-quarter earnings, which are expected Tuesday.

Analysts predict the company will earn 89 cents a share, according to the Institutional Brokers Estimate System.

The company said last month that it anticipated a higher third-quarter restructuring charge because of costs associated with the spinoff.

The initial estimate of a $60 million to $70 million charge was raised to a range of $85 million to $100 million, partly because more people chose to accept an early retirement offer.

Charles Ronson, an investor and analyst in New York, said Signet's latest registration statement shows the company plans to sell a maximum of 175 million shares of Capital One.

But the statement does not say what percentage of the company those shares represent, said Mr. Ronson, who publishes The Spinoff Report.

Signet initially had said it planned to sell only 19.9 percent of the card company to the public. More than 2,200 of Signet's employees work for the credit card operation, and more will be transferred as part of the spinoff. The headquarters are slated for Northern Virginia.

With about 4 million customers and $6.6 billion in credit card loans, Signet is the 10th-largest bank credit card issuer in the nation and the 15th-largest overall. The credit card division generates almost two-thirds of Signet's earnings.

In addition to the name change, Capital One has a few new executives, according to Signet: James M. Zinn, formerly a partner at Ernst & Young, will serve as chief financial officer; and John G. Finneran, who was a deputy general counsel at Federal Deposit Insurance Corp., will be general counsel to Capital One.

Signet is the parent of Signet Bank subsidiaries in Maryland, Virginia and Washington. About 1,700 of its 8,000 employees work in Maryland.

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