HSBC is planning to float up to 30% of its British retail and commercial banking arm, pre-empting incoming banking regulation.
The move by HSBC will ensure it complies with the Vickers regulations requiring all banks in the UK to ringfence their retail banking divisions.
HSBC has already been engaged in negotiations with its investors to check their intention to support the idea to list its £20bn UK banking operation, reported the Financial Times.
People familiar with the matter were quoted by the news agency as saying that the proposal is still in the early stages, and will be done through IPO.
An executive of HSBC was quoted by The Telegraph as saying that, "Given the trouble you have to go to to establish a self-contained operation, with its own capital and governance, you might as well go the whole hog and spin it off."