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HSBC to Raise $17.7 Billion, Cut 6,100 Jobs as Profit Declines
March 2 (Bloomberg) -- HSBC Holdings Plc, Europe’s biggest bank, plans to raise 12.5 billion pounds ($17.7 billion) as it cuts 6,100 jobs and closes its HFC and Beneficial consumer lending units in the U.S.
Net income for 2008 fell to $5.73 billion compared with $19.1 billion the previous year, the London-based lender said today in a Regulatory News Service statement. That was lower than the $13.6 billion median estimate of 10 analysts in a Bloomberg News survey. HSBC also cuts its full-year dividend by 29 percent to 64 cents a share.
HSBC Holdings PLC plans to curtail its disastrous foray into U.S. consumer lending by pulling back from key businesses, The Wall Street Journal reported, citing people familiar with the matter. HSBC may announce the moves as soon as Monday, when it announces 2008 results that were hurt by a dismal fourth quarter and combined slowdowns in the U.S., Asia and Latin America, the report said. In particular, HSBC is largely throwing in the towel on its 2003 purchase of Household International Inc., a $14 billion deal that saddled it with a U.S. subprime lender which has seen its results worsen amid the housing downturn, the report said. HSBC had already ceased originating new U.S. auto loans, and now people familiar with the bank's plans say it will stop providing personal loans while continuing to offer credit cards, according to the report.