Chapter 1155: The top three banks are all mine

While Xia Yu was building the financial market in Hong Kong, the British banking market was undergoing huge changes.

The three victims of the Latin American sovereign debt crisis had been trying to save themselves, and the British government was also doing its best to help resolve the crisis.

However, the situation of the three banks, Barclays Bank, National Westminster Bank and HSBC Holdings, is very different.

The one in the best situation is National Westminster Bank, which is not far behind the largest bank Barclays Bank in terms of size, but its debt is about three-fifths of Barclays Bank's.

The old family behind National Westminster Bank is certainly no match for the Rothschild family alone, but together, they are not weaker than the Rothschild family in the UK. They have the most self-help methods and the deepest relationship with the British government.

The second best-placed is not HSBC Holdings, but rather Barclays Bank, which has the most crisis-ridden debt.

Barclays Bank has the most debt and the greatest risk, but the Rothschild family is just too powerful, and it has been raising funds continuously and responding to the run on the bank in various ways.

Although the Bright Fund has been manipulating public opinion behind the scenes, as time passed, Barclays Bank continued to provide cash for depositors to withdraw, and over time, the panic of depositors gradually dissipated.

Therefore, after Barclays' market value fell below 4 billion pounds, although it is still shrinking, the rate of decline has slowed significantly.

However, Barclays has also been selling assets and allowing depositors to withdraw their money, which has led to a decrease of more than 10 billion US dollars in the bank's total assets.

HSBC Holdings is in the worst situation, and the reason is actually very simple. First, Latin American debt is less but accounts for a high proportion of the bank's assets; second, the shareholders behind the scenes are not as strong as Barclays Bank and National Westminster Bank.

HSBC Holdings holds US$6.94 billion in sovereign debt and has lent more than US$7.53 billion to companies in Latin American countries and elsewhere, totalling US$14.47 billion. This is less than six times that of Barclays and about US$1.6 billion less than that of National Westminster Bank.

However, before the crisis, HSBC Holdings' total assets were only US$57.13 billion and total deposits were about US$53.4 billion.

The bank's total assets were equivalent to about 65% of those of NatWest, and total deposits were equivalent to about 66%.

However, risky debt as a percentage of the bank's total assets reached 25.3%, which was 1.5 percentage points lower than Barclays' 26.8%.

This is not even the worst of it.

HSBC Holdings is the parent company of HSBC Bank, and HSBC Bank is the core subsidiary of HSBC Holdings, accounting for more than four-fifths of HSBC Holdings' total assets.

However, the sovereign debt and risky loans held by HSBC Holdings only account for less than two-thirds of HSBC Holdings.

If the debts and assets of HSBC Holdings are stripped out,

HSBC Holdings' risky debt ratio reaches an astonishing 40%!

This is far higher than that of Barclays Bank's National Westminster Bank!

This kind of insider data is something HSBC Holdings desperately wants to hide.

But since Bright Fund is one of HSBC's shareholders, George Berkeley deliberately plotted in secret, and naturally he found out the situation early on. He secretly instructed someone to send these secret data to newspapers that were not affiliated with Bright Fund.

So after the secret data was exposed, HSBC Holdings was in dire straits and became the largest bank that was closest to bankruptcy and collapse.

The British government spent the greatest effort to support HSBC Holdings, and the major shareholders behind the bank were also forced to do their best to save it.

However, even this could not prevent the rapid loss of HSBC's assets.

HSBC's total assets fell below 50 billion US dollars, which, excluding the Hongkong and Shanghai Banking Corporation, made HSBC's risk-to-asset ratio reach over 55%.

Even if it did not go bankrupt, HSBC became a junk stock, with its market value shrinking severely. From the original market value of more than 4.3 billion pounds before the crisis, it fell directly below 1 billion pounds.

But the stock remained unattractive.

The risk of bankruptcy was just too great.

At this time, more than 3,000 banks around the world were involved in the Latin American sovereign debt crisis, and few major banks in Europe and the United States escaped.

For example, of the four major banks in the UK, only Lloyds Bank was lucky enough to escape. The assets of the other banks were getting smaller and smaller, and they were too busy avoiding HSBC to even think about taking over.

The Lloyd's Bank, which survived the disaster, is also afraid to jump into the pit.

If it wants to take over the company, it will have to wait until HSBC Holdings is really bankrupt, and then it can just grab some high-quality assets.

However, what made many people dumbfounded was that there were really some people who dared to take over HSBC Holdings.

That was the Bright Fund, one of the major financial institutions in the UK!

At first, the Bright Fund just bought HSBC Holdings' stocks on the stock market, when no one wanted to buy them, and no one noticed.

And the Bright Fund itself was a shareholder and director of HSBC Holdings, so there was no need to disclose any increase in shareholding.

It wasn't until the Bright Fund had absorbed more than 30% of the shares on the stock market within two days, increasing its shareholding to more than 35%, that the institution was discovered and caused a heated debate.

But HSBC Holdings' share price still couldn't rise.

Because when George Berkeley didn't mobilise the media to create positive public opinion, public opinion was generally not optimistic about the actions of the Bright Fund.

This was exactly what George Berkeley wanted.

He went directly to Margaret Thatcher, and after some discussion, obtained strong support from the British government.

Then, with the British government as a go-between, he approached those shareholders of HSBC Holdings who had not yet sold their shares.

These shareholders were not unwilling to sell their shares; they were also worried that if the bank went bankrupt, they would be implicated by the tens of billions of dollars in debt, and would have to use other family assets to make up the difference.

However, these major shareholders were all being watched by the British government, which forbade them from taking any actions that would worsen the situation, such as selling their shares, and even required them to raise funds to maintain HSBC's capital chain.

This made these shareholders envy those with small shares and minority holdings, while at the same time feeling miserable.

Now that the British government has lifted the ban on them, allowing them to privately transfer their shares to the Bright Fund, they have all agreed, and have proposed that the transfer must be at the current market price.

As for a premium?

No one dared to mention it. After all, if they were allowed to sell their shares on the stock market, it would definitely be enough to crash the stock price again, and they would not be able to sell all their shares.

Now that they could transfer them at par, it was considered a very high demand.

However, George Berkeley was not stupid, and he seized the opportunity to drive down the price as much as possible. These shareholders had no choice but to agree with a pinch of their nose. In the end, all the shares were bought at an average of 92% of the current price.

Subsequently, the Bright Fund, with the assistance of the Securities and Futures Commission, quickly completed the privatisation.

The entire operation cost a total of £784.26 million, and it bought HSBC Holdings, which had a market value of over £4.66 billion before the crisis.

The whole process took only 18 short days!

The efficiency was shocking.

However, with HSBC Holdings being wholly owned by the Bright Fund, this also meant that more than $10 billion in risk debt also fell on the Bright Fund.

If HSBC Holdings goes bankrupt, then the parent company, Bright Fund, will have to use its assets to cover it.

This has caused investors in some private or public funds set up by Bright Fund to worry endlessly, and some are even preparing to redeem their funds to avoid being dragged down by Bright Fund.

However, George Berkeley was not panicked. He had already considered this, so he had long since applied for help from Xia Yu, and it was only after receiving Xia Yu's instructions that he dared to go to Margaret Thatcher to make a major commitment.

The day after Bright Foundation took full control of HSBC Holdings, it held a press conference with HSBC Holdings and the Governor of the Bank of England.

The entire conference was broadcast live on the BBC. At the conference, George Berkeley announced that the company's shareholders had jointly raised 10 billion US dollars without touching the company's funds, and that all of the money had been deposited in the account of HSBC Holdings, as a show of support and trust.

Deposit slips were also displayed at the conference, and the Governor of the Bank of England testified on the spot that Bright Foundation had indeed deposited 10 billion US dollars into the bank account of HSBC Holdings.

It was precisely because George Berkeley proposed this practical solution when he met Margaret Thatcher that he received the full support of the British government.

After the press conference, the whole of Britain was shocked by the Bright Fund's generosity, and the crisis at HSBC Holdings was subsequently minimised.

The impact then quickly spread around the world, and the name Bright Fund became known throughout the world.

In fact, this $10 billion was secretly lent to the Bright Fund by a consortium of banks including the Royal Bank of Scotland, Standard Chartered Bank, Jiuding Bank, Island Chiba Bank, and Wells Fargo Bank, and deposited into HSBC Holdings by the Bright Fund.

The reason for not letting these banks support HSBC Holdings was that they did not want to reveal their strength, and the identities of the banks were too sensitive. If the public opinion was not properly controlled, it would easily drag these banks down as well.

Therefore, Xia Yu chose to let Guangming Fund take the lead, and at the same time, he took the opportunity to advertise Guangming Fund around the world.

As it turned out, the advertising effect of this billion-dollar campaign was extremely impressive.

At least one thing is certain: Margaret Thatcher gained a deeper understanding of Xia Yu's strength. After all, there are very few people who can mobilise one billion dollars of liquid capital in a short period of time.

Bright Fund acquired HSBC Holdings, and naturally also owned 54.7% of its subsidiary, HSBC Bank.

Together with the 39.7% currently held by Jiuding Securities,

Xiangjiang HSBC Bank has been controlled by Xia Yu with 94.4% of the shares, and the remaining small portion is scattered in the Xiangjiang stock market.

While the bigwigs in the political and business circles of Xiangjiang were still lamenting the change of ownership of HSBC Holdings and the power of Guangming Fund, they did not know that Xia Yu had already firmly established himself as the overlord of the Xiangjiang banking industry.

Xiangjiang's largest bank, Jiuding Bank, the second largest, Xiangjiang HSBC Bank, and the third largest, Standard Chartered Bank, are all Xia Yu's!