HSBC welcomes capital build-up for industry

The Hongkong and Shanghai Banking Corp. (HSBC) has expressed support for the proposal of the National Government of the United Kingdom to provide liquidity and inject capital into the UK banking system.

“These are important and necessary steps in restoring confidence to the sector,” it said.

Consistent with the objectives of the UK scheme, HSBC will ensure that its principal UK subsidiary, HSBC Bank plc, continues to be appropriately capitalized, funded from the Group’s internal resources.

“HSBC therefore has no current plans to utilize the UK recapitalization initiative,” it added.

The HSBC Group supports efforts to stabilize the operation of financial markets by providing significant amounts of liquidity to the London Sterling interbank market, lending around £2 billion of three-month and six-month money to other banks. HSBC expects to be very active in the London interbank market again.

HSBC believes its actions will contribute to easing the strain in UK money markets, where the availability of three-month and six-month interbank loans has been very tight in recent weeks.

HSBC operates in 85 countries and territories worldwide, including the UK, which represented approximately one quarter of our global profits in 2007. With a market capitalization of $190 billion as of October 2008, the HSBC Group is one of the world’s largest financial services organizations.

Over 100 million customers worldwide entrust HSBC with $1.2 trillion in deposits. With a tier one capital ratio of 8.8 percent and a loan to deposit ratio of 90 percent as at June 30, 2008, the Group remains one of the most strongly capitalized and liquid banks in the world.