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HSBC Holdings to sell its retail banking business in France

HSBC Holdings Plc has announced the sale of its retail banking business in France.

HSBC Continental Europe has signed a memorandum of understanding regarding the potential sale of HBCE’s retail banking business in France.

HSBC Holdings Plc, which is also the parent company of HSBC Bank Bermuda Ltd, said the potential sale includes HBCE’s French retail banking business; the Crédit Commercial de France brand; and, subject to the satisfaction of relevant conditions, HBCE’s 100 per centownership interest in HSBC SFH (France) and its 3 per cent ownership interest in Crédit Logement.

The potential sale would be expected to complete in the first half of 2023. According to HSBC, financial impacts of the potential sale on the HSBC Group are currently expected to include an estimated pre-tax loss on sale of about $2.3 billion, together with an additional $700 million impairment of goodwill.

It said the potential sale would not include HBCE’s life insurance or asset management manufacturing businesses. HBCE, through its subsidiaries, would enter into distribution agreements with the purchaser for insurance and asset management products.

The business in the potential sale consists of a network of 244 retail branches, serving 800,000 customers at the end of 2020, with customer loans balance of $26.2 billion, customer deposits of $23.1 billion, and credit risk-weighted assets of $7.1 billion at the end of last year.

It is anticipated that approximately 3,900 HBCE employees would transfer with the business in accordance with relevant legislation.

Noel Quinn, HSBC group chief executive, 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.”

HSBC said the MOU includes details of the parties’ information and consultation processes of their respective employees’ works councils, which will commence shortly. If, following the outcome of these processes, the parties were to decide to proceed with the potential sale, they would enter into a governing transaction agreement setting out further terms for implementation, including regulatory approvals and other conditions.

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Published June 21, 2021 at 7:45 pm (Updated June 21, 2021 at 7:45 pm)

HSBC Holdings to sell its retail banking business in France

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