Don’t bank on it

Over the last couple of years we have seen the banking industry fluctuate with alarming velocity and impulsive variation. The Northern Rock blunder enabled spread betting gamblers to have a sure bet on the fall in share prices, as well as their success in general.

The burning question now is, have other banks and financial companies learned from this or will it be up to the Government, yet again, to bail someone out? Recently, an announcement from HSBC confirms that they are looking to raise money, £12.5bn from its shareholders to be precise, and this is perhaps a signal that although they are attempting to claw themselves out of a hole, the fact of the matter is that they are in trouble.

However, before you decide that the above is sound advice for a solid wager, you must take into account that HSBC are not just looking to ‘sponge’ the money from other people. Following a loss in profits in 2008, the bank’s shares fell dramatically so as well as seeking its shareholders’ assistance, the bank’s Chairman, Stephen Green has announced there will be no bonuses within the company, preferring to rebuild public trust rather than reaching out with the begging bowl. So, don’t think that because a company is in trouble that they are a sure bet, if working as a collective continues at HSBC, their troubles could be over sooner than they think.