HSBC finally offloads its French retail bank, but at a loss of $2.3bn
After 18 months, sale is in sight
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.”
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.
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.”
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.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
