Investors approved HSBC Holdings Plc's record 12.9 billion pound ($18.4 billion) rights issue on Thursday, which the bank said would keep it financially strong as it faced "unprecedented turmoil".
The bank said over 99 percent of shareholders who voted supported the rights issue and 92.9 percent approved a related resolution allowing the bank to briefly disapply pre-emption rights for some investors.
"We are still facing unprecedented turmoil, with major uncertainties ahead. We are determined HSBC should maintain its signature financial strength," Chairman Stephen Green said at a shareholder meeting ahead of the vote.
Several investors voiced their anger at the bank's purchase of U.S. consumer lender Household six years ago, however, which has caused the bank to lose billions of dollars and forced it to turn to investors for cash, they said.
"We bought a puppy that developed distemper and then rabies, and has now had to be put down," said Michael Mason-Mahon, a private shareholder.
Green acknowledged the purchase of Household had been a mistake. The bank is now running down its U.S. consumer finance arm, but that is likely to take several years.
Knight Vinke, the activist shareholder that has been urging HSBC to walk away from its U.S. business, said management should now set out for investors their plans for minimising the impact on profits of further U.S. losses that have not been realised.
"STRONG & LIQUID"
The rights issue, announced on March 2 alongside news the U.S. problems had dragged annual profits down 62 percent to $9.3 billion, will eclipse the 12 billion pounds raised by Royal Bank of Scotland as Britain's biggest rights issue.
HSBC said it was "strong, liquid and profitable" and had been more resilient than rivals during the crisis. It reiterated its performance in January had been ahead of its expectations, and that February had been in line with its expectations.
HSBC, traditionally one of the world's most highly capitalised banks, had resisted raising capital or turning to governments for help while rivals absorbed billions of dollars in losses as the credit crisis deepened.
The rights issue will add 150 basis points to HSBC's capital ratios, boosting the core tier 1 ratio to about 8.5 percent and the tier 1 ratio to 9.8 percent.
HSBC is selling 5.1 billion shares at 254 pence each in its fully underwritten 5-for-12 offer.
By 1250 GMT, HSBC shares were up 11.5 percent at 486.75 pence, as part of a surge in UK bank stocks on optimism that the Federal Reserve's decision to pump an extra $1 trillion into the economy, announced Wednesday, could help inspire an economic recovery.
The rights issue is being underwritten by Goldman Sachs, JPMorgan Cazenove, HSBC and three other co-bookrunners.
