Standard Chartered announces £3.3 billion rights issue
Standard Chartered, the UK-based banking operation with major exposure to the Far East, has today announced a £3.3 billion rights issue which will boost the company's core tier 1 capital ratio. This is the measure of financial strength in the worldwide banking sector and the additional funding is required to comply with forthcoming Basel III rule changes on capital adequacy. This comes despite the fact that banks officially have until 2019 to comply with the new regulations.
It seems that Standard Chartered believes that regulators around the world will push for early compliance with the Basel III recommendations. Whether this is the case not remains to be seen but additional capital for the likes of Standard Chartered at this point of the economic cycle will do no harm. It will be interesting to see whether other UK banks follow suit because this could cause short-term weakness in the banking sector and will test the resolve of investors to part with their money.
While there has been some talk of fundraising in the banking sector over the past few months the £3.3 billion cash call from Standard Chartered did catch some people by surprise but in hindsight maybe we should have expected this?
Share this..
Related stories
UK dividends down 15% on average in 2009
In a reflection of the state of the UK economy and the UK stock market it has been revealed that the average dividend paid by companies in the UK fell by 15% in 2009. This equates to £57 billion which is around £10 billion less than the corresponding figure in 2008 and an obvious disappointment for investors in the UK. While the figure of 15% is enough to grab the headlines, when you consider...
Read MoreBP boss set to leave company
Tony Hayward, the chief executive of BP, is rumoured to be on the verge of leaving the group with an announcement expected with tomorrow's second-quarter figures. It is believed that the board of directors are currently in negotiations regarding a multimillion pound severance package which they hope will draw a line under the BP crisis in the Gulf of Mexico and allow the group to move forward. It...
Read MoreCan the UK government afford the East Coast main line?
The UK government has been forced to take back ownership of the East Coast mainline rail franchise after former operator National Express failed to balance the books. However, there is now great concern that under the ownership of the UK government it could cost taxpayers more than ever before to travel on this particular line. Indeed there are already signs that ticket prices will be increasing i...
Read MoreRBS takeover of ABN Amro to be investigated
The £60 billion acquisition of ABN Amro by Royal Bank of Scotland back in 2007 is set to be investigated by the Financial Services Authority (FSA). While many people have been calling for a formal investigation of the takeover it is a surprise to see that nearly 2 years after the acquisition the FSA is set to act. So what is the basis of the investigation?
The investigation will lo...
Glossary of Investment Terms (P)
Glossary of Investments – P The following are useful investment terms beginning with ‘P’ Package Trade This refers to the purchase of a basket of investments and is often related to derivatives dealing, index tracking or some kind of arbitrage trade. Paid-up Benefits These are preserved benefits in a pension arrangement where contributions have ce...
Read More