Shares in HSBC slumped as much as 12% in trading today, following a report by analysts at Morgan Stanley predicting the UK bank will need to raise as much as $30bn in new capital this year and halve its dividend. The slide came on the same days as shares in UK banks fell amid concerns over mounting losses on toxic assets.

Morgan Stanley analysts published a report called, Why we think HSBC needs $20-30bn of capital and to halve its dividend, today, in which they said the bank should halve its divided to preserve cash and predicted it will need to raise a significant amount of funds as it faces losses on its book of assets.