HSBC Holdings (LON:HSBA) has completed the separation of its ring-fenced bank following a High Court approval in May, City A.M. reports. The move comes with UK lenders required to separate their retail operations from riskier investment banking from next year.
HSBC’s share price has fallen deep into the red in today’s session, having given up 1.46 percent to 700.30p as of 13:29 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.77 percent in the red at 7,578.13 points.
HSBC sets up ring-fenced bank
City A.M. reported today that HSBC had finished setting up its ring-fenced bank, after receiving High Court approval on May 21. The newswire quoted the lender as saying that HSBC UK has over £200 billion in assets and received its banking licence from the Prudential Regulation Authority on June 27.
While the UK arm is wholly owned by HSBC Holdings, the parent company, it has a separate board led by former London Stock Exchange chief executive Dame Clara Furse, while Ian Stuart and David Watts are chief executive and chief financial officer, respectively.
“We are delighted to complete the ringfencing of HSBC UK six months ahead of the legal deadline,” Stuart said, as quoted by City A.M.
Today’s news comes after HSBC unveiled last week that it had appointed Royal Bank of Scotland Group’s (LON:RBS) outgoing finance chief Ewen Stevenson as its finance director.
Analysts on Asia-focused lender
According to MarketBeat, HSBC currently has a consensus ‘hold’ rating and an average price target of 769.06p. As of June 29, the consensus forecast amongst 23 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.
HSBC is scheduled to update investors on its interim performance on August 6.