Friday 22 September 2017

HSBC weighs up floating 30pc of UK banking arm

HSBC is considering floating up to 30pc of its British retail and commercial banking arm to help meet UK regulation and unlock value for shareholders, the 'Financial Times' has said.

British banks now have to ringfence their retail banking units from riskier investment banking under new rules designed to give more protection to depositors and taxpayers should any more bailouts be needed.

A listing would be a logical move to meet that requirement.

The 'FT', citing three people familiar with the project, said the plan was at an early stage but the matter had been discussed with investors and informally at board level.

HSBC declined to comment.

HSBC is Europe's biggest bank with a market value of £122bn (€145bn) and its UK arm is estimated to be worth about £20bn.

"Such a move would crystallise a higher rating for the whole group, especially in the light of buoyant investor sentiment on the UK economy," said Shailesh Raikundlia, analyst at Espirito Santo.

REVERSE

If HSBC listed its UK arm it would partially reverse its takeover of UK bank Midland more than 20 years ago, which resulted in it moving its stock market listing to London from Hong Kong.

There is frequent speculation the bank could move its headquarters back to Asia, and spinning off its retail business into a separate UK listing may make that prospect more likely, analysts said.

HSBC is structured as a collection of country-based subsidiaries, and the holding company wholly owns its businesses around the world.

The main exception is its 62pc holding in Hong Kong bank Hang Seng.

Irish Independent

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