CS Credit Suisse Group

   By Austen Hufford 
 

Capital One Financial Corp. (COF) is selling about $17 billion worth of mortgages to a subsidiary of Credit Suisse AG as it works to exit the mortgage business.

The move comes after Capital One said in November that it would stop offering new home loans, citing the complex and competitive nature of the business and the interest-rate environment. Interest rates on typical mortgages have remained well below those seen in the run-up to the financial crisis.

Capital One said it was selling about $17 billion of first and second lien mortgages to DLJ Mortgage Capital Inc., a subsidiary of Credit Suisse. Capital One expects to complete the transaction and record a gain in the second quarter of 2018.

"Strong market demand enabled us to negotiate and sign this complex transaction more quickly than we thought possible," Capital One financial chief R. Scott Blackley said.

As a result of the sale, Capital One will resume repurchasing shares of its common stock through the end of its second quarter.

Shares of Capital One rose 2.3% in morning trading in New York. Credit Suisse shares are down 0.1% in Zurich trading.

Write to Austen Hufford at Austen.Hufford@wsj.com

(END) Dow Jones Newswires

May 08, 2018 10:16 ET (14:16 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.