HSBC retail arm spin-off talk fails to impress the City
Monday 09 December 2013
City insiders today played down talk that HSBC could be planning to float off a slug of its UK High Street business with a potential value of £20 billion.
It was reported that the bank had sounded out investors about floating 30 per cent of the business as a way of dealing with the Vickers Commission recommendation that banks ring-fence their retail operations away from their riskier investment banking activities.
HSBC declined to comment today.
It is believed that the bank, led by Stuart Gulliver, discussed a range of plans for dealing with ring-fencing at the end of last year but has no current plans to float off its UK arm.
Shailesh Raikundlia, analyst with Espirito Santo, pointed out that to ensure ring-fencing in this way HSBC would have to redomicile the rest of its business to Hong Kong.
He said: “The group’s main UK subsidiary, HSBC Bank PLC, is a lot broader in nature than a ring-fenced bank would be — it contains investment banking operations that would not be allowed within a ring-fence and also houses some continental European business.”
London is already braced for massive share offers from banks with the Government keen to sell its remaining 33 per cent stake in Lloyds, the separate flotation of TSB and their Williams & Glynn’s spin-off from Royal Bank of Scotland. Former Barclays chief executive Bob Diamond is also looking to raise some £150 million for his new African banking venture.
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