Markets Dive as HSBC Shuts US Business, Axes 6,100

Banking giant sells record $17.8B in new stock
By Jason Farago,  Newser Staff
Posted Mar 2, 2009 3:47 AM CST
HSBC Holdings PLC, Europe's largest bank by market value, says it will raise $17.7 billion by issuing shares after reporting a 70 percent drop in profits in 2008, when the financial crisis deepened.   (AP Photo/Vincent Yu)
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(Newser) – European and Asian markets took a nosedive today, and HSBC announced it will sell $17.8 billion in new stock in the largest rights issue in British corporate history. Europe's largest bank ended last year in the black, posting a $9.3 billion profit. But HSBC wrote off $10.6 billion from its US business and said it would shut down the two American mortgage arms it owns, and fire 6,100 workers, reports the Financial Times.

Bank officials said the company would refuse any bonus in cash or shares. In an uncommonly frank statement, chairman Stephen Green said he wanted HSBC "to play our part in rebuilding public trust." Along with Barclays, it's one of only two major British banks not to seek government aid. Japan's Nikkei, meanwhile, finished down 3.8% and Europe was off in early trading as Wall Street teetered on the brink of 12-year lows.