The lender is said to be considering the IPO ahead of the incoming Vickers rules which will demand that banks ring-fence retail, which includes customer deposits and small business loans, from investment banking activity. While a formal separation is not required, experts have suggested that the bigger banks could go that one step further and completely spin off their retail unit.
“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,” said one executive who knows HSBC well.
While the bank may be looking into floating its UK arm, the FT reports that its sources played down any suggestion that HSBC was looking to move its headquarters from London, with any questions of redomiciling “off the table”.
If the bank does go ahead with the stock market listing it would be the latest in a slew of banks to announce their intention to float.
Just yesterday it emerged that OneSavings Bank was examining a stock market flotation next year. The group, which trades under the Kent Reliance brand name, has reportedly started discussions with banks about a potential flotation that could give JC Flowers & Co, run by US financier Christopher Flowers, a way out of its investment in the company.
Meanwhile Lloyds Banking Group is preparing to float its TSB subsidiary next year with a valuation in the region of £1.5bn to £2bn, and Royal Bank of Scotland is planning to float a new challenger bank under the revived Williams & Glyn’s brand in late 2015.