The sale includes HBCE’s French retail banking business the Crédit Commercial de France (CCF) brand, the HSBC SFH (HSFH) and 3% stake in Crédit Logement
HSBC headquarters at Canary Wharf, London. (Credit: Gordon Joly/Wikipedia.)
HSBC Continental Europe (HBCE) has reached a Memorandum of Understanding (MOU) with Promontoria (My Money Group), its subsidiary Banque des Caraïbes and My Money Bank (‘MMB’), for the sale of retail banking business in France.
My Money Group, MMB and Banque des Caraïbes are directly or indirectly controlled by the funds and accounts managed or advised by Cerberus Capital Management.
The sale includes HBCE’s French retail banking business the Crédit Commercial de France (CCF) brand, the HSBC SFH (HSFH) and 3% stake in Crédit Logement.
The transaction valued at €1.6bn, subject to adjustment in certain circumstances, is expected to generate an estimated pre-tax loss of around €1.9bn for HBCE.
HBCE CEO Jean Beunardeau 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.
“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.”
HBCE has a network of 244 retail branches, around 800,000 customers, €21.5bn in customer loans and €18.9bn in deposits related to its retail banking activities in France.
The divestiture is expected to involve the transfer of around 3,900 employees, pursuant to relevant legislation.
The transaction, which is expected to close in the first half of 2023, is structured such that the parties may close it even if the conditions to transfer HSFH and the 3% ownership interest in Crédit Logement are not satisfied.
Once the proposed transaction is closed, the Banque des Caraïbes intends to operate the acquired assets under the CCF brand in mainland France.
HSBC group chief executive Noel Quinn said: “The signing of an MOU for the potential sale of our French retail banking business represents a significant step in progressing the actions we announced during our strategic update earlier this year.
“It will enable us to dramatically simplify our business in Continental Europe and allow us to accelerate the transformation of our European wholesale banking franchise.
“We are committed to remaining as a leading international wholesale bank in Continental Europe, capitalising on our global network and serving our multinational customers both inbound and outbound.”
Last month, HSBC has announced its plans to close its US retail banking business to focus on the banking and wealth management needs of international high net-worth clients.