HSBC finally offloads its French retail bank, but at a loss of $2.3bn

Business
HSBC finally offloads its French retail bank, but at a loss of $2.3bn
After 18 months, sale is in sight
HSBC billboard
PA Wire
Jim Armitage
@
ArmitageJim
18 June 2021
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HSBC
today said the long-awaited
sale
of its troubled
French
retail banking
business
to Cerberus, the
US
investment fund group, would see it make a
loss
of $2.3 billion on the sale.
The
bank
has been looking to sell the French business for more than 18 months as part of its strategy to focus down on its fast growing
Asian
operations and get out of most of its continental
European
and US operations.
The sale has been complex but today HSBC confirmed it would go to a group of Cerberus-controlled
businesses
called Promontoria MMB which trades as My Money Bank and Banque des Caraibes.
MMB is primarily a debt consolidation and commercial property business while Banque des Caraibes does retail and commercial banking.
The business being sold has $28.9 billion of gross assets including $26.2 billion of customer loans.
Its 244 retail bank branches serve 800,000 customers.
However, HSBC said it saw it as “a relatively subscale retail network”.
Chief executive Noel Quinn said a sale would “dramatically simplify our business in Continental Europe and allow us to accelerate the transformation of our European wholesale banking franchise.”
Read More
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HSBC pulls out of US retail banking market
HSBC sells chunk of US retail banking operations in push for Asia
Technically, today’s deal is characterised as the signing of a memorandum of understanding for a potential sale because it now has to go the employee works councils at the various divisions being sold. The move includes 3400 French workers.
On top of the pre-tax loss on the sale of $2.3 billion, HSBC will write off $700 million of goodwill.
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