HSBC raised £12.5B from shareholders in 2009 and doubled profit by 2010

In March 2009 HSBC launched a £12.5 billion rights issue, the largest ever undertaken in the City without government support, offering five new shares for every 12 held at 254p — more than 40% below the market price. The cash was needed after its US consumer arm, Household, drove the North America business to a $15 billion loss.

The result was a vote of confidence: 96.6% of shareholders took up their rights, and chairman Stephen Green said the bank was determined to "maintain its signature financial strength." The contrast with rivals was stark — RBS was about to see the government's stake rise to 70% as investors shunned its own fundraising.

HSBC also moved to close most of the Household-branded consumer finance network, saving $700 million a year. Within two years the strategy showed: 2010 pre-tax profit came in at $19 billion, more than double 2009's $7.1 billion, and HSBC said it had been profitable in every customer group and region for the first time since 2006.

Raised £12.5B at 254p (5-for-12 rights), avoided government support, and reported 2010 pre-tax profit of $19B, up from $7.1B.

A rights issue priced deep below market guaranteed take-up and avoided the uncertainty of a placement.

Staying out of the government's recapitalization kept HSBC free of state ownership and bonus restrictions.

Closing Household cut the loss-making US consumer book rather than subsidizing it.

Asking shareholders, not the state, for capital can cost more in the moment but keeps control and strategy — and markets reward independence.

By February 2011 HSBC's market value exceeded the combined value of Barclays, Lloyds and RBS, and bad-debt charges had fallen from $26 billion to $14 billion. The rights issue came to define how a strong bank survives a crisis: raise from your own shareholders, cut the losing business, stay independent.