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HSBC calls for £12.5bn in rights issue

HSBC is calling on shareholders to help it raise £12.5bn as it reveals 2008 profit drop of 62 per cent.

The bank posted profits of £6.5bn, 62 per cent down on 2007’s £14.4bn, and expects a “difficult outlook for 2009”.

The bank is offering over 5 billion shares at 254p each – almost half of Friday’s HSBC share price of 491.25p.

The bank also admitted it regretted the acquisition of HFC Bank and Beneficial brands in the US. HSBC lost more than $15bn in North America.

HSBC group chairman Stephen Green says: “HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken.”

Green also revealed that he would not be receiving any cash bonus, neither will his executives. No performance share awards would be offered to any staff also.

He adds: “We at HSBC were not immune from the crisis. But we have built our business on very strong foundations and are able to report results, which demonstrate our ability to withstand the storm. Our strategy has been tested and remains intact.”

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