London-based global lender HSBC is considering floating up to 30% of its British retail and commercial banking arm, as part of its strategy to ringfence retail banking division to meet new regulatory requirements.
Sources familiar with the matter were quoted by the Financial Times as saying that the bank is negotiating with its investors for a listing of its £20bn UK banking operation.
If the proposal materializes, which is still in the early stages, the UK bank will dispose of a sizeable stake in the UK business, the sources told the news agency.
The bank is likely to float the new unit through IPO, to comply with forthcoming banking regulation, known as Vickers rules.
An executive of HSBC was quoted by The Telegraph as saying that, "Given the trouble you have to go to to establish a self-contained operation, with its own capital and governance, you might as well go the whole hog and spin it off."
It is not only HSBC, which is gearing up to float the UK retail banking business, its counterpart Lloyds Banking Group is also planning to float its TSB subsidiary next year, to meet the EU state aid norms.