HSBC is set to sell its French retail banking business to Cerberus Capital Management-backed My Money Group.
The move comes less than a month after the lender announced its retreat from the US market.
Go deeper with GlobalData
Deal Details:
HSBC Continental Europe (HBCE), a subsidiary of HSBC Holdings, signed a memorandum of understanding (MoU) with Promontoria MMB SAS (My Money Group), its subsidiary Banque des Caraïbes and My Money Bank (MMB) to sell the business.
The potential sale will include Crédit Commercial de France (CCF) brand, the retail banking business in France.
The transaction may also include HBCE’s 100% ownership interest in HSBC SFH (France) (‘HSFH’) and its 3% stake in Crédit Logement, subject to certain conditions.
The sale of CCF brand is expected to close even if the last two transactions fail to proceed.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataHowever, HBCE, through its subsidiaries, will continue to retain its existing insurance and asset management activities in France.
The potential deal is expected to close in the first half of 2023.
Financial Details:
As agreed, HBCE will divest the business at a nominal consideration of €1. This will result into an estimated pre-tax loss of €1.9bn ($2.26bn).
The net asset value of the business is expected to be €1.6bn ($1.9bn), at closure. If the valuation falls, HSBC agreed to compensate the shortfall.
French retail banking business:
The French business has 244 branches and serves around 800,000 customers. It had around €18.9bn in deposits and €21.5bn in customer loans along with other assets and liabilities.
Around 3,900 employees will also move under the ownership, in accordance with relevant legislation.
After the deal closes, My Money Group is expected to operate the business under the CCF brand in mainland France.
Quote:
HBCE CEO said: “This potential transaction is an important step towards achieving our strategic goal of being a leading wholesale bank in Continental Europe for Corporate and Investment Banking, Markets and Private Banking, anchored in Paris, connecting our customers to HSBC’s global network, and providing access to Continental Europe for HSBC’s customers around the world.
“As importantly, this potential transaction would allow HSBC’s French retail banking business to be sold to an experienced investor for whom retail banking activities will be at the heart of the strategy and therefore more able to support its development over the long term in France.”
HSBC has been working on reducing its footprint in the European and American markets to focus on Asian operations.
Recently, Dutch multinational lender ING also initiated a strategic review of its retail banking business in France.
