Morgan Stanley credit card arm up for sale

The Discover branch of Morgan Stanley credit cards may soon be sold off, with HSBC, Royal Bank of Scotland and Barclays all reportedly showing interest.

The card provider last week indicated it would issue its investors with shares in Discover to create a separate company valued at over £10 billion.

According to reports from Reuters the three British based banks have all expressed interest in Discover and all three are looking to expand their US credit card market shares.

"It's an invitation to people like HSBC, Barclays and Royal Bank of Scotland to take a look at the business," said an investment-banking source. "The question is not if but when they approach Morgan Stanley."

"Would they (the British banks) strategically be interested? Absolutely," added Keefe Bruyette & Woods banking analyst Mark Thomas. "Royal Bank, Barclays and HSBC are all very active in card issuance and merchant acquisition, and Discover has got both sides of the business."