Outlook: Back-to-the-future banking on the cards at HSBC – or is that Midland?

Outlook: The bank has reportedly sounded out investors about the partial flotation of its UK bank

First there was the resurrection of TSB. Now that HSBC is apparently considering spinning off its UK arm, it seems that the old Midland Bank, the core of that business, may make a return.

Will an independent Scotland lead to the resurrection of an independent NatWest south of the border from the wreckage of Royal Bank of Scotland?

If that happens it really will be back to the future in banking. The next thing you know there’ll be a fierce debate about branch closures followed by a Government-commissioned report into business banking which ministers will duly ignore when it recommends radical reform.

Come to think of it, we’re nearly there on the former, given Barclays’ recent announcement of job cuts at its branch network. As for the latter, well, it’s only a matter of time. Is Don Cruickshank available for a second outing?

Maybe the past isn’t such a foreign country after all.

Those who lived through banking’s past can’t  have missed the cynicism that was regularly on display. That hasn’t gone anywhere.

Take HSBC’s supposed plan. The bank has reportedly sounded out investors about the partial flotation of its UK bank, which might appear strange given that it has previously talked about the UK and Hong Kong as its “twin homes”.

However, in theory a partial spin-off of the UK retail and small business bank has a certain logic to it. If you’ve got to ring-fence it anyway, why not go the whole hog and cut it loose, which would realise some value for the shareholders, generate some capital for the bank, and open up a host of richly remunerated new boardroom posts for ambitious bankers within the organisation. I’ll leave you to draw your own conclusions as to which of those was at the forefront of the minds of the people who cooked this one up.

But over and above that there is another motive. HSBC has long used the stick of quitting London as a lobbying lever. Reports of what is claimed to be a “routine” triennial review of domicile have a habit of appearing in sympathetic places whenever the Government or regulators in this country or in Europe are looking at doing something HSBC takes exception to.

When people got rather fed up of this, it said the review was “off the table” until regulatory changes prompted by the financial crisis had bedded in.

Now, it seems, we’re back there again because the real benefits from a spin-off would, in theory, only come if HSBC shipped its domicile over to Hong Kong at the same time, thus avoiding regulation that will cost it a bit, but probably not as much as scandals such as the money laundering affair that led to £1.2bn in fines and was attributable to the failings of HSBC’s culture and executives.

Yesterday there was apparently a memo sent around to staff saying, ‘don’t worry, it’s not going to happen’. Of course it’s not. Not now the message has been delivered.

Bonham Carter sticking around may set a precedent

Edward Bonham Carter is a rarity in the City in that he’s a chief executive who might just be worth the money.

Having played a key role in the ousting of the company’s founder John Duffield, he subsequently steered the company through a management buyout then piloted a wildly successful flotation. He’s also proved to be highly effective at the more mundane task of running the business day-to-day when the excitement of such corporate upheaval is over. On his watch Jupiter has become a force to be reckoned with, and a business with an increasingly international reach.

Given all that, it’s not especially surprising that the company wants to keep him around now he has decided that, after 14 years at the top, it’s time for an infusion of new blood.

As such it has created the position of “executive vice chairman” for him. Part of this will see him becoming a sort of Mr Jupiter; an ambassador who’ll jet around the world giving speeches and using his name to sell the Jupiter name.

But there’s a more serious job to be done too: building bridges with the international regulators which are having an ever increasing impact on the business.

That’s a role that the personable Bonham Carter would seem well suited to fulfilling. The company has also been at pains to stress that he will not be a back seat driver breathing down the neck of his successor Maarten Slendebroek, who joined from Black Rock last year. Bonham Carter will, in theory at least, be a part-time employee and he won’t hold a place on the executive committee. There oughtn’t to be any friction with his successor, at least in theory.

All the same, the title of “executive vice chairman” is at least questionable on governance grounds and for good reason.

While “comply or explain” is the rule in the City, a company like Jupiter really ought to be setting an example of best practice. In going down the route of making Mr Bonham Carter an “executive vice chairman”, a role that still leaves him with considerable power, it leaves the door open for other less well-governed companies to point to Jupiter when doing the same on rather flimsier grounds.

Say, to keep a powerful shareholder sweet, or to boost the pay and perks of a favoured son without recourse to what is  in shareholders’ best interest.

Unfortunately, a shareholder like Jupiter which ought to make a fuss about such behaviour may now find it rather harder to do so.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most