HSBC plans to spin off UK banking unit

Nathan Andrada – Fourth Estate Cooperative Contributor

London, United Kingdom (4E) – Britain’s largest bank HSBC has sounded off investors of its plans for a flotation of its UK unit, in a move that would realize value from its high street banking business and tackle pressures from regulators.

In recent weeks, the bank has asked investors whether they would support its plan to sell a significant portion of its UK business. People who have knowledge about the plans said that the company has discussed about the issue internally.

The Financial Times reported that there have been informal conversations at the board level to measure the opinion on the idea.

The plan, which is very much at the early stages, would most likely include a minority stake of up to 30 percent in the UK retail and commercial banking operation, according to the Financial Times citing people familiar with the matter.

Investors have predicted that the UK unit could float around 20bn pounds in total market value.

If the plan proceeds, it would coincide with a number of other British bank listings. Lloyds Banking Group is poised to float its TSB subsidiary in 2014, as part of the EU state aid penalties imposed after obtaining rescue funds from the UK government. Williams & Glyn, a unit of Royal Bank of Scotland, also plans to list by 2015 under similar EU penalty rules.

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