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| HSBC to raise 12 bn pound; bad loans to touch 17 bn pound |
| Press Trust of India / London Mar 01, 2009, 17:31 IST |
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Europe's largest bank HSBC is likely to unveil a 17 billion pound provision against bad loans and a 12 billion pound rights issue alongside its annual results tomorrow, media reports say.
"HSBC is likely to unveil a 7 billion pound goodwill write-off in addition to a 17 billion pound provision against rising bad loans, tomorrow alongside a heavily discounted 12 billion pound rights issue," the Sunday Times said.
Meanwhile, another leading British daily the Telegraph said the lender is also to announce the closure of its troubled US mortgage lending operation -- Household tomorrow.
Household has racked up billions of pounds in losses since it was acquired six years ago. Large parts of the operation would now be closed down and almost all the value attributed to the business would be wiped out.
The fund-raising would make the lender the strongest bank in the world that has not received a cash injection from the state. However, the fund raising would add fuel to a campaign by the fund manager Knight Vinke, which has been calling for HSBC to allow Household to go bankrupt, the Telegraph added.
Quoting people close to the bank the Telegraph said, "It will also cut its dividend by at least a third."
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