HSBC spends 1bn to maintain clout in China

Ensuring HSBC will remain a key player in mainland China is going to cost the firm more than one billion pounds.The UK's biggest bank is spending HK$13,264m on a share placing by the Chinese lender, Bank of Communications, or BoCom for short.The subscription will see HSBC maintain its shareholding in China's fifth largest bank at 19.03%, leaving it the second biggest investor behind the Chinese government.BoCom has been forced to raise the equivalent of £5.7bn to maintain its core capital levels above the 11.5% demanded by the Chinese banking regulator.Stuart Gulliver, HSBC's Chief Executive said: "Maintaining our stake in BoCom reinforces our position as the leading foreign bank in mainland China and is consistent with our strategy to deploy capital in faster growing markets."HSBC shares had dropped 0.42% by 10:14.