Ian Stuart will become chief executive of the newly ring-fenced institution, subject to regulatory approval.
Stuart will be based in Birmingham, in the head office of the retail bank.
Under rules due to be set out by the Prudential Regulation Authority (PRA), banks must separate their "core" retail and business banking arms from their corporate and investment divisions by the beginning of 2019, with HSBC's retail operation, HSBC UK, created a result.
HSBC previously had connections with the city through the Birmingham and Midland Bank, which it acquired in 1992. It currently has 2,500 employees in the city.