Merrill Lynch

( MER) and London-based banking group

HSBC Holdings

(HBC)

will commit up to $1 billion to form an online financial services company serving customers outside the U.S., the companies said Tuesday.

Each firm will own half of the new firm, tentatively named

Merrill Lynch HSBC

. It will have its headquarters in London.

The new company will offer online banking and brokerage services and attempt to attract retail customers "across the world except in the U.S.," the companies said in a statement.

The business will model itself on

Merrill Lynch Direct

, an online investment service targeted at affluent investors. The new business will combine the New York-based investment bank's research with HSBC's "extensive presence in the world's emerging markets," the companies said.

It will sell customers stocks, bonds, mutual funds and unit trusts tailored to the differing tax laws of various geopolitical markets. The companies said customers will have access to physical offices and to clerks by telephone.

The companies said it was estimated that in the next decade, the number of households in Europe, Asia, Japan and Latin America that have access to the Internet and are active investors will quadruple to 50 million. They did not disclose the source of the current or future estimate.

The companies did not say whether there are any plans to sell a stake in the new venture to the public. Neither company's shares traded hands before markets opened Tuesday, according to

Instinet

.

Merrill Lynch closed at 90 1/4 Monday. HSBC closed at 56 3/8.