HSBC - the smug bank. And it can afford to be with a core Teir 1 capital ratio of about 7.7 per cent. (RBS, at 5.7 per cent, has the lowest of the five largest UK banks.)
Consistent with the objectives of the UK scheme announced today, HSBC will ensure that our principal UK subsidiary, HSBC Bank plc, continues to be appropriately capitalised, funded from the Group’s internal resources. HSBC therefore has no current plans to utilise the UK recapitalisation initiative.
Of course, we don’t know for sure yet what Teir 1 level Messrs Brown and Darling are targeting. But even if it’s 8 per cent, HSBC clearly doesn’t want the British government on its share register.
HMHSBC would be such a mouthful.
What’s more HSBC believes it can do what the authorities have been struggling to do for months - namely help free up the interbank lending market.
The HSBC Group supports efforts to stabilise the operation of financial markets and yesterday provided 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 today. 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.
