0835 GMT - HSBC's management will have to decide whether to subscribe to Bank of Communication's capital raise and take a capital hit but protect its share of the lender's earnings or allow dilution and see potential pretax losses, Keefe, Bruyette & Woods says in a research note. Four of China's largest banks including BoCom--which is 19% owned by HSBC--will raise $72 billion through share sales to investors. "On balance, we suspect that [HSBC] management will not subscribe unless there is pressure from the Chinese government, but will surely have to finally recognize reality and writedown the investment to market value at Q1, knocking circa $8.8 billion off [tangible net asset value] or -38 pence (-6%) a share," analysts Edward Firth and Elise Yu Ge write. Shares in London trade 1.4% lower at 873.2 pence. (elena.vardon@wsj.com)
(END) Dow Jones Newswires
March 31, 2025 04:35 ET (08:35 GMT)
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