Nem vem que não tem
(Carlos Imperial)
Nem vem que não tem
Nem vem de garfo que hoje é dia de sopa
Esquenta o ferro, passa minha roupa
Eu nesse embalo vou botar pra quebrar
Sacudim, sacundá, sacundim, gundim, gundá!
Nem vem que não tem
Nem vem de escada que o incêndio é no porão
Tira o tamanco, tem sinteco no chão
Eu nesse embalo vou botar pra quebrar
Sacudim, sacundá, sacundim, gundim, gundá!
Nem vem, numa casa de cabloco, já disseram
Um é pouco, dois é bom, três é demais!
Nem vem, guarda seu lugar na fila
Todo homem que vacila, a mulher passa pra trás!
Nem vem que não tem
Pra virar cinza minha brasa demora!
Michô meu papo, mas já vamos'imbora!
Eu nesse embalo vou botar pra quebrar
Sacudim, sacundá, sacundim, gundim, gundá
HSBC made the stark admission today that it regretted diving into America's subprime market six years ago as it launched the biggest shareholder cash call in UK corporate history.
In another sign of the turmoil sweeping the banking sector, HSBC reported this morning that its profits had dropped by two thirds and it was raising $17.7bn (£12.5bn) in a rights issue. The large fall in profits was mainly caused by losses at HSBC Finance Corporation, its US operations which it bought in 2003 and which is now being wound down with thousands of job losses.
The world's third largest bank also made it clear that its executive directors would not be taking cash bonuses in 2008 – a year in which there had been a "question about the culture and ethics of the industry".
Chairman Stephen Green said: "It is as if, too often, people had given up asking whether something was the right thing to do, and focused only whether it was legal and complied with the rules. The industry needs to recover a sense of what is right and suitable as a key impulse for doing business."
However HSBC also admitted that one of its bankers was paid over £13m last year.
HSBC shares fell 10% in early trading to 443p.
The five-for-12 rights issue at 254p will be the largest undertaken in the City without government support. Royal Bank of Scotland held the previous record of £12bn as a result of its fundraising in April but raised a further £20bn with the government's backing.
Green said: "Today HSBC is well capitalised, liquid and profitable. We are determined that HSBC should maintain its signature financial strength which is supported by a conservative balance sheet characterised by an advances to deposits ratio of 83.6%."
Pre-tax profits slumped 62% to $9.3bn, although these would have been down 18% without a goodwill impairment – largely caused by the acquisition of Household in the US – to stand at $19.9bn. The troubled North America division fell to a $15bn loss after barely scraping a profit in 2007 because of a $10.6bn goodwill writedown relating to the acquisition of Household, which its operates through the HFC and Beneficial brands.
The bank will stop writing any new consumer finance business through those two operations and will close the majority of the network.
Green, who was chief executive at the time of the Household deal, said: "HSBC has a reputation for telling it as it is. With the benefit of hindsight, this is an acquisition we wish we had not undertaken". The chairman at the time was the now retired Sir John Bond.
The rights issue will add 150 basis points to HSBC's capital ratios, strengthening the core equity tier one ratio to 8.5% and enhance the bank's ability to "respond to unforeseen events as well as provide opportunities to grow through targeted acquisitions".
As a result of the rights issue the dividend will be cut, ending a 15-year run of increases. Shareholders will receive $0.64 including fourth interim dividend of $0.10, a fall of 29%, or around 15% in sterling terms.
The bank's loan impairment charge leapt by $7.6bn to $24.9bn. The bank tried to show its strength in emerging markets with mainland China profit before tax of $1.6bn, up 25%, India up 26% and Middle East rising 34%.
Green said: "The industry has done many things wrong. It is important to remember that many ordinary bankers have always sought to provide good service to their customers; but we must also recognise that there have been too many who have profoundly damaged the industry's reputation.
"Inappropriate products were sold inappropriately by many. Compensation practices ran out of control and perverse incentives led to dangerous outcomes. There is genuine and widespread anger that the contributors to the crisis were in some cases amongst the biggest beneficiaries of the system."
He stressed the bank would not need the help of government in the way that HBOS, Lloyds and Royal Bank of Scotland have and that the bank would alter its pay policies.
"Over the past 12 months, many of our competitors have received significant government capital injections - something we said we could not envisage - or have raised capital from shareholders and other investors," Green said.
"At HSBC, we are committed to the principle of sensible market-related pay, structured to align executive actions with long-term shareholder interests. A small number of individuals in a market system will inevitably receive compensation that is high in absolute terms, but this must be genuinely linked to long-term shareholder interests. It is clear that the banking industry got it wrong in the go-go years: we will play our part in helping the industry respond appropriately to the new realities."
Green's pay fell to £1.2m from £3m a year ago while chief executive Michael Geoghegan's fell to £1.6m from £3.5m. As usual they were not the highest paid directors. The bank revealed that one banker below board level who does not have to be identified, earned between £13.7 and £13.8m. Another earned between £11m and £11.1m. Three others earned between £3.3m and £2.6m.
