HSBC and Merrill Lynch create online bank

NEWS HSBC and Merrill Lynch have teamed up to form an online bank. The two finance giants are equal partners in the venture, which will use the Internet to target affluent customers seeking banking and securities services. The newly created company - Merrill Lynch HSBC - will operate internationally outside the US, and while its base will be in the UK, services will be tailored to local markets via the Web and call centres. A deposit account will offer stocks, bonds, mutual funds, unit trusts and various tax efficient products. The financial services giants are contributing $1bn in start-up capital, and Ed Goldberg, executive VP of operations services at Merrill Lynch, said the venture will break even in four to five years. Sir John Bond, group chairman of HSBC, said the main targets will be clients that currently use other financial institutions, and promised the move will accelerate the implementation of HSBC's ebusiness strategy. HSBC has been working with IBM for two years to bring Internet technology into its business. The new venture is expected to create several hundred new jobs.