HSBC to raise new capital, cut jobs

HONG KONG: HSBC Holdings yesterday said it would raise a total of $17.7 billion in new capital from shareholders in a rights issue to strengthen its financial structure after reporting a more than 50 percent fall in 2008 earnings and, as expected, a surge in bad debts in the US.

Europe's largest bank is in the process of offering 5.1 billion new shares at 254 pence apiece, or a 48 percent discount on Friday's closing price, for subscription by its existing shareholders. In Hong Kong, the issue price per new share is at HK$28, or a 50.2 percent discount to its Friday close of HK$56.95.

Group Chairman Stephen Green disagreed that the rights issue had come too late. "I think it is the right timing when we get the information about our 2008 performance."