02 Mar 2009
March 2 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, plans to raise 12.5 billion pounds ($17.7 billion) as it cuts 6,100 jobs and closes its HFC and Beneficial consumer lending units in the U.S.Net income for 2008 fell to $5.73 billion compared with $19.1 billion the previous year, the London-based lender said today in a Regulatory News Service statement. That was lower than the $13.6 billion median estimate of 10 analysts in a Bloomberg News survey. HSBC also cuts its full-year dividend by 29 percent to 64 cents a share.
While HSBC has set aside more than $42 billion to cover bad loans during the past three years, it has avoided taking U.K. government funding, unlike Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc. The bank, which gains more than three- quarters of profit from emerging markets, faces recessions in economies in Asia this year.
"Today HSBC is well capitalized, liquid and profitable," Chairman Stephen Green said in the statement.
HSBC has reduced lending, fired managers and sold units to reduce provisions at Household International and control losses. It has rejected pressure from shareholder Knight Vinke Asset Management LLC to separate the operation.
The company was the first European bank to report subprime losses after it bought U.S.-based Household International, since renamed HSBC Finance, for $15.5 billion in 2003.
The bank said in December that it had $1 billion at risk after providing financing to funds that invested with Bernard Madoff, whose New-York-based money-management firm collapsed in an alleged $50 billion Ponzi scheme.
HSBC booked a gain of $2.4 billion from the July sale of seven regional banking units in France to Banque Federale des Banques Populaires.
The stock has declined 26 percent this year, the best- performer in the five-member FTSE 350 Banks Index.
