HSBC PLC, (NYSE:HBC) Europe’s largest bank, reported Monday a 70 per cent drop in 2008 net profit. The bank also announced a cost reduction plan which will cut 6,100 jobs from its workforce.
The bank said it would close the majority of its HFC and Beneficial-branded US branch network, resulting in the loss of 6,100 jobs and that, with the exception of credit cards, the US divisions would write no further consumer finance business.
The banking giant also unveiled plans to raise £12.5 billion ($17.9 billion) by issuing new shares to existing shareholders via a so-called rights issue. HSBC shares dropped 23 per cent in London.
HSBC also confirmed that it lost about $1 billion in the alleged investment fraud by Wall Street financier Bernard Madoff.
For 2009, HSBC indicated the dividend may be reduced yet again — it expects to pay a dividend of $0.08 for each of the first three quarters, with a variable payout for the final quarter.
Image by willsurvive under Creative Commons.
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