HSBC suspends trading ahead of results
02-03-2009
HSBC is reported to have decided to scale back its American consumer finance operations, as it launches a US$17-billion rights issues to boost its capital base. The bank suspended trading of its Hong Kong-listed shares today, saying it would reveal a "corporate action" when it released its annual results this afternoon. The Financial Times newspaper said the bank is expected to announce that it will further downsize its US-based credit card and mortgage lender. The US consumer finance arm, HSBC Finance Corporation, has stopped writing new subprime mortgages -- the source of mounting losses for the division -- and closed its car loan business in the United States. The newspaper also said HSBC would cut dividends and unveil a US$17 billion share offering which is expected to set a record for the biggest rights issues to be funded by private investors. The offer is to be underwritten by a consortium of global banks led by Goldman Sachs and JPMorgan Cazenove, it said. The Chief Executive of HSBC, Michael Geoghegan, and other members of his board, will reportedly waive their entitlement to multi-million pound bonuses this year. However, the British newspaper the Guardian says executives of the bank based in Hong Kong are thought to be likely to take their entitlements.
