NEW YORK ( TheStreet) -- HSBC ( HBC), Europe's biggest bank, said early Wednesday it agreed to sell its U.S. card and retail services business to Capital One Financial ( COF) for a premium of $2.6 billion.

The total value of the deal, including the premium, is about $32.7 billion, HSBC said in a statement.

HSBC said it would record a gain of about $2.4 billion from the sale.

The gross assets of the business being sold were about $30.4 billion as of June 30. The sale of HSBC's monoline U.S. credit card and private label credit card business doesn't include HSBC Bank USA's $1.1 billion credit card program.

The deal is expected to close in the second quarter of 2012.

Back in May, HSBC said it was reviewing its credit-card business in the U.S. and retreating from retail banking in some countries in an effort to cut costs by up to $3.5 billion within three years.

For Capital One, the acquired business is expected to add to earnings in 2013. The acquisition comes on the heels of the bank's acquisition in June of ING Direct USA.

Capital One said it may raise up to $1.25 billion in capital. The bank said it will pay cash but has the option to sell $750 million in stock to HSBC for $39.23 a share.

-- Written by Joseph Woelfel

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