HSBC USA Inc. Announces Changes to Capital Structure.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 21, 2000 The following is the text of an 8-K that was filed with the SEC today. HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) USA Inc. (HUSI) has distributed its 49% interest in HSBC Republic Holdings (Luxembourg) SA (HRH) from its subsidiary, HSBC Bank USA HSBC Bank USA, N.A., the United States subsidiary of the HSBC Holdings plc, is a bank with its head office in New York City. History The Hongkong and Shanghai Banking Corporation acquired a 51% shareholding in Marine Midland Bank of New York State, headquartered in (HBUS) to its parent, HSBC North America, Inc. The distribution, in the form of a special dividend in the amount of $2.9 billion, included its investment in HSBC Investments (Bahamas) Limited in addition to the $2.5 billion investment in HRH. The transfer is the first step in an internal reorganization of the HSBC Group's global Private Banking operations under a European holding company, with the intent of aligning legal ownership and functional management. The 49% interest in HRH (the former Safra Republic Holdings) was acquired as part of the HSBC Group's acquisition of Republic New York Republic New York Corporation was the holding company for the Republic National Bank of New York and the Safra Republic Bank. The company was controlled by billionaire Edmond Safra, who was killed in a fire in his Monte Carlo penthouse apartment in 1999. Corporation at year-end 1999. The special dividend will reduce the Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. of HBUS and HUSI by $2.9 billion but their net total regulatory capital will reduce by only $0.4 billion because the $2.5 billion ownership interest in HRH has been disregarded when computing the total capital ratio for regulatory capital purposes. The following table discloses the proforma impact of the special dividend on the capital ratios of HUSI as if the dividend were made on September 30, 2000:
After
Previously Special
Reported Dividend
Tier 1 Capital Ratio 12.8% 8.1%
Total Capital Ratio 14.2% 13.5%
Leverage Ratio 8.9% 5.6%
All of the above ratios remain in excess of the FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). well-capitalized standards. The special dividend was distributed after receiving the approval of both the New York State Banking Department and the Federal Reserve Board. Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. , Standard & Poor's and Fitch have indicated that there has been no impact on their ratings of HUSI or HBUS as a result of this transaction. New York-based HSBC USA Inc. is the 13th largest US bank holding company by total assets and is the holding company for HSBC Bank USA; Republic Bank California N.A. and the HSBC Group's interest in the Wells Fargo HSBC Trade Bank. HSBC has more than 430 branches in New York, seven branches in Florida, two in Pennsylvania and three in California. For more information about HSBC Bank USA, visit www.banking.us.hsbc.com. HSBC USA Inc. is an indirectly-held, wholly-owned subsidiary of HSBC Holdings plc (NYSE NYSE See: New York Stock Exchange :HBC HBC a definition for medical records to denote 'hit by car'. ), which is headquartered in London. With over 6,000 offices in 81 countries and territories, the HSBC Group is one of the world's largest banking and financial services organisations. |
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