Investors will find out on Tuesday the extent of further write- downs at HBOS, owner of the UK's biggest mortgage lender, the Halifax, amid concerns the bank will launch a rights issue.
At its annual meeting in Glasgow, chief executive Andy Hornby will give a full picture of the bank's capital position, including further writedowns that analysts say could be as high as £1bn. An HBOS spokesman declined to comment.
HBOS's exposure to risky American mortgage-backed securities is thought to be high, second only to Barclays among the UK's top five banks. Analysts say that if the bank decides to adopt a higher capital reserve, then it will need a cash call.
Royal Bank of Scotland announced the biggest-ever rights issue last week when it called on investors for £12bn.
City regulator the Financial Services Authority is investigating the raid on shares in HBOS, in which its stock price crashed by 20 per cent in a single day in March. The shares finished up 1.6 per cent on Friday at 497p.Reuse content