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HSBC announces £12.5bn rights issue

HSBC has launched a £12.5bn rights issue as the banking giant reveals full-year pre-tax profits of £6.5bn.

The figure is down 62% from the previous year’s profits of approximately £17bn.

HSBC has also announced it is to close its US consumer lending operations HFC and Beneficial as soon as practical.

The bank will continue to service the existing portfolio while running it down, but has pledged to continue to help home owners with their loan payments and to keep their homes.

A statement from HSBC reads: “HSBC remains committed to the US financial services market, including the remaining businesses in HSBC Finance, as well as its US banking operations under HSBC Bank.”

On the rights issue Stephen Green, HSBC Group chairman, says: “Further strengthening our capital base will enhance our ability to deal with the impact of an uncertain economic environment and to respond to unforeseen events, as well as giving us options regarding opportunities which will undoubtedly present themselves to those with superior financial strength.”

HSBC shares in early morning London trading fell 10% on the news of the rights issue.

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