futures looking just as ugly as earlier today, page-11

HSBC offers shares after slide in profit
Europe's largest bank in $17.75 billion recapitalization plan after 2008 income slumps 62% after charge.

LONDON (Reuters) -- HSBC launched a £12.5 billion ($17.75 billion) rights issue Monday to shore up its balance sheet after annual profit fell and as bad debts soared in the United States.

Europe's biggest bank will offer 5.06 billion shares at 254 pence each, making it Britain's largest ever rights issue. The issue price is at a 48% discount to Friday's close of 491.25 pence.

The bank reported an adjusted 2008 pretax profit of $19.9 billion, down 18% versus 2007, but said that profit had slumped 62% to $9.3 billion from $24.2 billion a year earlier once it had included the impact of a goodwill impairment charge of $10.6 billion.

Pretax profit had been expected to drop to about $19 billion, according to the average forecast from Reuters Estimates.

The bank also cut its dividend for the full year by 29% to 64 cents per share and said it would close its troubled U.S. consumer loans business.

The company said losses in the United States last year amounted to $15.5 billion, including the $10.6 billion goodwill impairment charge