HSBC Says No Need to Raise Further Cash

HSBC, Europe's biggest bank, said it had no need to raise further cash, removing some of the uncertainty over possible further fund-raising by the lender.

Kirsty Wigglesworth / AP

HSBC spokesman Gareth Hewett confirmed on Monday that Chief Financial Officer Douglas Flint, who met institutional investors, fund managers and analysts in Hong Kong last week, had commented that there was no further fund-raising plan for the time being.

"It has a short-term impact to support the stock price and aids investors confidence," said Alfred Chan, a chief dealer at Cheer Pearl Investment, referring to the CFO's comments.

In Asia, shares of HSBC rose to as high as HK$39.55 before trimming gains to HK$38.70, still up 1.2 percent and faring better than the 0.96 percent gain of the benchmark Hang Seng Index.

In London, HSBC shares were 7.3 percent higher by the European close.

HSBC's Flint said that the UK lender was unlikely to go back to shareholders for more cash after its almost $18 billion rights issue, according to local media reports on Monday.

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Flint was confident that the group's London-based parent would need no bailouts from the British government even if the economic climate in the United States and Britain worsened.

"The US$17.7 billion we are raising seemed to be an amount that made us extremely robust in any set of circumstances we could foresee," the South China Morning Post quoted Flint as saying.

The paper added he forecast the U.S. subprime lender, Household Financial Corp, would not need any financial help from the group by the end of next year.

Brokers said many investors were staying on the sidelines to see the response and actual impact of the rights issue.

Earlier this month, the UK lender launched Britain's biggest rights issue, raising 12.85 billion pounds to help it overcome big losses in the United States and exploit the woes of weaker rivals.

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