HSBC Rights issue

HSBC plans to raise GBP12.5 billion to help bolster its capital cushion and fund acquisitions. This capital raising,
despite the negative news, is a positive one as it points to the bank’s significant strength and a new-found
confidence in the banking sector which has proven to be hugely significant. This capital raising will be a
rights issue to its already existing shareholders and will not entail significant injections or assistance
from banks as is the case with RBS and Llyods. This will be a plain old rights issue to its shareholders.

Posted by Shue on April 28th, 2009 :: Filed under HSBC

HSBC – Business as usual

Europe’s largest bank disclosed a fall in profits over the 2008 business year. HSBC has however escaped much of the credit crisis due to its focus being primarily targeted towards emerging markets and businesses. In fact, the bank does not seem to be affected and last month it declined a financial boost from the UK government clearly stating that it does not envisage any future circumstances that would require the bank to be offered any financial assistance. HSBC is also the only bank that has asked its investors for cash while other banks like Barclays have done so, even going to Middle East investors for financial assistance. Last September, its financial strength was at 8.9% and is expected to rise to 10.5%, a key measure of its financial position.