Katrina not only put a damper on electronic commerce in the Gulf region, it also put a stop, at least temporarily, to Capital One Financial Corp.'s plan to buy Hibernia Corp., the New Orleans-based owner of the largest retail bank in Louisiana.
Cap One lowered its bid on the $22 billion-asset bank from $5.35 billion to $5 billion and pledged to close the deal in the fourth quarter.
Hibernia reported that 107 of its 310 branches were in areas hard hit by Katrina. Of those, 47 had opened in early September, 60 were closed and 21 sustained major damage. The branches represent 5% of Hibernia's deposits.
Cap One announced the deal in March, saying Hibernia would provide a diversified funding source and a reduced-risk profile. Kathleen Shanley, an analyst at Gimme Credit, said that might still prove true but that Cap One faces a daunting challenge now to achieve those goals.
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