HSBC has released its 2006 Annual Report, so I thought I’d take a look at their regulatory capital to see if any issues can be hoped for from that direction. I’ve discussed Tier 1 Capital before in a mini-series of posts: Part 1, Part 2 & Part 3.
| HSBC Tier One Capital
(From December 31, 2006 Financial Statements) |
|
| Total Tier 1 Capital (millions) | 3,283 |
| Common Shareholders’ Equity | 76.7% |
| Preferred Shares | 10.7% |
| Innovative Tier 1 Capital Instruments | 12.2% |
| Non-controlling interests in subsidiaries | 0.9% |
| Goodwill | -0.5% |
So if they wished, they could issue addition non-cumulative perpetuals to a total of 2.1% of capital, or $69-million worth, and have them all included in Tier 1 Capital – unfortunately, such a small issue scarcely seems worthwhile.
And, unfortunately, not only do their two outstanding issues (HSB.PR.C & HSB.PR.D) pay a dividend that’s not a lot more than market rates, but they’re not redeemable until 2010, either.
So … probably not much issuance from that quarter! Unless, of course, Canada’s banking laws triumphantly enter the 19th century, and HSBC developes an appetite for one of the big five!