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HSBC looking to cash in property assets

Last year's repurchase of its Canary Wharf headquarters saw HSBC bank profits of around £300 million after originally selling the property for £1.1 billion in a leaseback agreement in 2007. It is rumoured that HSBC is looking at selling a portfolio of property assets held by the group with the intention of raising around £2.5 billion to assist with the funding of the business. The bulk of the transactions are likely to be sale and leaseback agreements which would effectively allow the business to operate as normal while leasing as oppose owning the properties.

HSBC, along with Barclays bank, is one of the few UK banking operations to escape the grasp of the UK authorities so far. However, the sale of prime property assets at the bottom of the market is causing concern among some analysts who are worried about the capital ratios of the business. This comes just days after a £12.5 billion rights issue was approved and accepted by shareholders, potentially taking funds raised to the £15 billion level.

Quite why the directors of HSBC are so desperate to raise such large amounts of money is also causing some concern amongst investors but hopefully answers will be forthcoming in the short term.

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