HSBC shareholders take 96% of rights issue

Banking giant HSBC today said shareholders had taken up 96.6% of the new shares on offer in a £12.5bn (€13.7bn) rights issue.

The heavily-discounted cash call was the largest in UK corporate history after HSBC sustained heavy losses on its operations in the United States.

The strong take-up of new shares, which reached 98.2% in Hong Kong, is unsurprising given HSBC offered the stock to existing investors at 254 pence each. The share price was 434.5p on Friday night.

HSBC said it met more than 350 institutional investors during the two-month process, with the feedback described as "very positive". It said the cash call maintained the company's "signature" financial strength.

Chief executive Stephen Green added: "We remain confident that HSBC is well-placed in today's environment and that our strength leads to opportunity."

Listed on five stock exchanges, HSBC shares are held by more than 210,000 shareholders in 120 countries. The company expects those shares not taken up in the rights issue to be sold in the market on Monday.

HSBC has not been forced to call on state support - unlike Royal Bank of Scotland, Lloyds and HBOS - but the announcement of a 62% fall in profits - alongside writedowns totalling a mammoth US$24.9bn (€18.4bn) - still sent shockwaves through the market in February.

The fundraising will boost HSBC's core equity tier one ratio - a key measure of a bank's capital strength - to 8.5%. It will also leave it in a better position to buy cheap assets sold by struggling rivals.