Trading of HSBC Bank (HBC) has been halted on the Honk Kong exchange tonight. And it is expected that trading halts for HSBC Bank will be issued in the European markets as well later this evening (morning in Europe).
From Reuters:
Europe’s biggest bank will unveil the cashcall early on Monday in London alongside its 2008 results, which will show profits fell by about a fifth as recession deepens across the world.
HSBC will seek to raise as much as $18 billion, one person familiar with the matter told Reuters on Saturday. Goldman Sachs, JPM Cazenove and HSBC will underwrite the offer, sources said.
HSBC is also expected to cut its dividend payout and further shrink its U.S. consumer loans business.[...]
HSBC is already running down much of its U.S. loan book, and its U.S. sub-prime consumer lending operations will be closed to new business, FT.com said on Sunday. HSBC will also write-off much of the goodwill on its balance sheet associated with its Household business, the report said.
Bad debts are also rising in Europe and Asia.[...]
INVESTORS TO SUPPORT RIGHTS ISSUE
The rights issue would be the biggest ever in Britain if it surpasses the 12 billion pounds raised by crisis-struck rival Royal Bank of Scotland last April.
Several investors told Reuters last week they would support a rights issue, and wanted management to act quickly to remove uncertainty hanging over its share price.
Shares are likely to be sold at a discount of between 35 percent and 40 percent, one source said.
HSBC has traditionally been one of the best capitalized banks in the world and has not raised capital while others scrambled for cash as the credit crisis deepened.
But while it may be able to ride out the storm, a delay may make any cash call it needs at a later stage more painful and investors may prefer to raise the cash now.
HSBC is expected to report a 22 percent fall in annual profits to $19 billion
Some reports indicate that HSBC’s only operations in the United States will be the issuance of credit cards after they shut down the loan origination business in the United States. But other reports over the past several months reveal that HSBC has been significantly cutting credit lines to existing holders of cards backed by HSBC bank.
Another large bank in trouble… The list grows by the day.
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