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| HSBC to announce £12bn share sale | HSBC to announce £12bn share sale |
| (about 2 hours later) | |
| Europe's biggest bank, HSBC, is set to announce a plan to raise more than £12bn through a new rights issue. | |
| The move is likely to be unveiled on Monday when the bank releases its financial results for 2008. | The move is likely to be unveiled on Monday when the bank releases its financial results for 2008. |
| BBC business correspondent Emma Simpson said the bank would ask its investors and shareholders to buy more shares in a bid to strengthen its position. | BBC business correspondent Emma Simpson said the bank would ask its investors and shareholders to buy more shares in a bid to strengthen its position. |
| She said HSBC was among the best capitalised banks in the world and had so far coped well in the downturn. | She said HSBC was among the best capitalised banks in the world and had so far coped well in the downturn. |
| Our correspondent said the move could set a new record for a rights issue by a bank and would allow HSBC to buy cheap assets from its rivals. | Our correspondent said the move could set a new record for a rights issue by a bank and would allow HSBC to buy cheap assets from its rivals. |
| As far as the bank was concerned, the share sale was being done from a position of strength and was designed to give it a bigger financial cushion to cope with any prolonged downturn, she added. | As far as the bank was concerned, the share sale was being done from a position of strength and was designed to give it a bigger financial cushion to cope with any prolonged downturn, she added. |
| Sub-prime mortgages | Sub-prime mortgages |
| In half-year results released last August, HSBC announced a 28% fall in its profits, warning that conditions in the financial markets were the toughest for "several decades". | In half-year results released last August, HSBC announced a 28% fall in its profits, warning that conditions in the financial markets were the toughest for "several decades". |
| Analysts expect the bank to report a 22% fall in profits when it announces its full-year results on Monday. | Analysts expect the bank to report a 22% fall in profits when it announces its full-year results on Monday. |
| Although HSBC has profitable operations in Europe and the Middle East, it has been hit by escalating losses in the US, because of its exposure to the sub-prime mortgage market. | Although HSBC has profitable operations in Europe and the Middle East, it has been hit by escalating losses in the US, because of its exposure to the sub-prime mortgage market. |
| Like its rival Barclays, HSBC turned down the chance to take part in the government's first banking bailout last October. | Like its rival Barclays, HSBC turned down the chance to take part in the government's first banking bailout last October. |
| At the time it said: "HSBC has not sought capital support from the UK government and cannot envisage circumstances where such action would be necessary." | At the time it said: "HSBC has not sought capital support from the UK government and cannot envisage circumstances where such action would be necessary." |
| Last April, Royal Bank of Scotland asked its shareholders for £12bn in an attempt to shore up its financial position. | Last April, Royal Bank of Scotland asked its shareholders for £12bn in an attempt to shore up its financial position. |
| However, this week it announced the biggest annual loss in UK corporate history and will now receive an additional £13bn from the taxpayer to shore up its balance sheet. | However, this week it announced the biggest annual loss in UK corporate history and will now receive an additional £13bn from the taxpayer to shore up its balance sheet. |