HSBC considering listing UK banking arm: FT

Mon Dec 9, 2013 5:40am EST
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LONDON (Reuters) - HSBC Holdings Plc (HSBA.L: Quote) is considering floating up to 30 percent of its British retail and commercial banking arm to help meet UK regulation and unlock value for shareholders, the Financial Times said on Monday.

British banks now have to ring-fence 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 $200 billion and its UK arm is estimated to be worth about 20 billion pounds ($32.7 billion).

"Such a move would crystallize 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.

By 0930 GMT (4:30 A.M. EST) HSBC shares were up 0.2 percent 660.9 pence, in line with a slightly firmer European banking index .

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.   Continued...

The logo of HSBC bank is seen at its office in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren