National Australia Bank launched a A$750 million-plus hybrid note issue yesterday. Despite the note issue being anticipated, the timing of the launch is interesting.It follows Westpac's announcement of the upsizing of its capital note issue to $1.25 billion (from $750 million), and coupon-setting at 320 basis points over the 90-day bank bill rate, last week. It also follows the release of NAB's 2013 first-quarter trading update last Thursday, and its risk and capital report on Monday. However, NAB chose the day on which CBA released its interim results to put out a prospectus, within which, if one reads far enough, the establishment of a non-operating holding company (NOHC) is flagged.  NAB goes on to say that no decision has been made to establish an NOHC but the bank nevertheless felt it was necessary to address the issue in the prospectus.The possibility of establishing an NOHC was first raised before the financial crisis and it seems the option is still under consideration. Such an initiative may have gained some impetus from moves currently underway in the United Kingdom and within the euro zone, particularly in France and Germany, to separate investment banking activities from mainstream banking. Establishing a NOHC is a practical way of placing different activities within separate subsidiaries that may form a banking group. This structure allows for separate capitalisation and operation, with each subsidiary having its own board of directors. An NOHC may have direct application for NAB's UK subsidiaries, and, even if it doesn't, it could be useful if Australia eventually moves to separate investment banking activities from mainstream banking. Admittedly, the investment banking activities of the major banks are modest.Only two banks have implemented NOHC structures so far. Macquarie Group was the first, electing to operate Macquarie Bank as a separate subsidiary from Macquarie's diverse range of other businesses, and Suncorp Group chose to separate its banking and insurance businesses. ME Bank was part of a holding company within Industry Super Holdings, but reversed that structure two years ago.As for NAB's hybrid note issue, it is a mirror image Westpac's capital note issue.NAB is seeking to raise A$750 million plus and will pay a coupon of 320 basis points to 340 bps over the 90-day bank bill rate. Obviously, NAB hopes the bookbuild, which takes place next Wednesday, will see the issue size increased to A$1.25 billion or more, and the credit spread set at 320 bps. While NAB may be at a disadvantage following Westpac so soon, it has an advantage in offering investors rarity value. Since the bank sold its income securities in 1999, retail investors have only had the opportunity to buy the subordinated notes issued last year. There has been much more retail-focused issuance from the other major banks, but not from NAB.The offer will open next Thursday and close to the general public on March 14.