HSBC profits slump 70% as more layoffs announced

Hard hit by the global financial crisis, Europe's biggest bank, HSBC, has announced a 70% fall in its annual net profits. It also announced a £12.5 billion rights issue, the biggest ever in the UK, as well as 6,100 layoffs in the United States.


AFP - HSBC, Europe's biggest bank, reported Monday a 70 percent slump in annual net profits as bad debts surged to almost 25 billion dollars (20 billion euros), causing it to launch a record British rights issue.

The British banking group said it planned to raise 12.5 billion pounds (17.8 billion dollars, 14.2 billion euros) and would axe 6,100 jobs in the United States by shutting most of its HFC and Beneficial branches.

HSBC said net profits tumbled to 5.728 billion dollars in 2008 compared to 19.133 billion dollars in 2007 as the global financial crisis took its toll.

"In this difficult environment, we missed our profitability targets," HSBC chairman Stephen Green said in the group's earnings statement.

"The coming twelve months will be difficult. We expect parts of Asia, the Middle East and Latin America to continue to outperform Western economies, but to be constrained by the global downturn."

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