HSBC May Sell $17 Billion of Shares to Boost Capital
HSBC Holdings Plc, Europe’s biggest bank by market value, may raise as much as 12 billion pounds ($17 billion) to bolster capital as bad U.S. loans erode earnings, said two people with knowledge of the situation.
The bank will consider a rights offering, said the people, who declined to be identified because terms of the transaction haven’t been completed. The Financial Times reported yesterday that Goldman Sachs Group Inc. and JPMorgan Cazenove were hired to underwrite the sale.
Financial institutions in Europe, led by UBS AG and Royal Bank of Scotland Group Plc, have been forced to raise more than $355 billion because of credit market losses and investment writedowns, according to data compiled by Bloomberg. Higher capital levels would give London-based HSBC the ability to buy assets from cash-strapped rivals, the FT said.
“The share sale could eliminate market concerns about the bank’s capital problem,” Lee Yuk-kei, Hong Kong-based analyst at Core Pacific-Yamaichi International Ltd., said today.
Richard Lindsay, a London-based spokesman for the bank, declined to comment on the capital-raising plans.
[ Continue reading original article at Bloomberg ]