HSBC Shutting Branches, Cutting Dividend

Shares of HSBC Holdings ( HBC) are down more than 19% so far today, after the company announced net profit for 2008 dropped 70% to $5.73 billion from $19.13 billion.

The company said it is closing its branch network of its HSBC Finance arm in the U.S., resulting in 6,100 job losses. The company will be looking to raise $17.7 billion from shareholders from a method of fund raising, called a "rights issue," which is popular throughout Europe.

The bank will pay a fourth interim dividend of 10 cents a share, down from 19 cents a year ago and resulting in a 29% drop in the total payout for the year to 64 cents.

We had removed shares of HBC from our "Recommended" list on Aug. 21, when the stock was trading at $77.37. The company will now have a dividend yield of 1.89%, based on the lowered dividend payout, and Friday's closing stock price.

The stock has broken to historic lows and therefore has minimal technical support. If the shares can firm up, we see overhead resistance around the $41 to $42 level. We would look elsewhere for better investment opportunities at this time.

HSBC Holdings is not recommended at this time, holding a rating of 2.5 out of 5 stars.

PNC Bank Slices Quarterly Dividend Payout 85%

Shares of PNC Bank ( PNC) were down 5% in early trading after the company announced it is reducing its quarterly dividend payout to 10 cents per share from 66 cents.

Management reaffirmed its overall capital and liquidity positions are strong, but extreme market deterioration and the changing regulatory environment drove the company to make this difficult but necessary decision.

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