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(From Guardian Unlimited)
Shares in HSBC tumbled by almost a quarter today after the bank launched the biggest shareholder cash call in UK corporate history and finally admitted that diving into the America's subprime market had been a serious mistake.
In another sign of the turmoil sweeping the banking sector, HSBC reported this morning that its profits had dropped by two thirds and it was raising $17.7bn (?12.5bn) in a rights issue . The large fall in profits was mainly caused by losses at HSBC Finance Corporation, its US operations which it bought in 2003 and which is now being wound down with thousands of job losses.
Activist investor Knight Vinke said that its campaign against the "catastrophic investment" in Household International had been vindicated.
HSBC shares tumbled by 24% this morning, losing 128p to 373p, helping to drag the FTSE 100 down by over 4%.
The world's third largest bank also risked sparking a new row …