The British bank HSBC said Friday it has agreed to sell its French retail bank to the Cerebus-backed My Money Group at a loss of $2.3 billion.
According to Reuters, the sale has a silver lining for HSBC, allowing it to “end its long struggle to dispose of the business as it focuses on Asia.”
Cerberus, a US-based private equity fund, already has stakes in other European banks, including Deutsche Bank and Commerzbank. With this latest deal, My Money will acquire HSBC’s 244 branches, roughly 3,900 employees and 24 billion euros in assets, effectively creating what the company calls a new challenger bank in France.
My Money will also bring back the Credit Commercial de France (CCF) brand and invest 200 million euros in the HSBC unit’s technology infrastructure.
“The deal marks HSBC’s second exit from a major Western market this year after it sold its US retail banking businesses, as Chief Executive Noel Quinn cuts his losses in markets where HSBC has long struggled to be profitable,” reports Reuters. “HSBC put its French retail business under ‘strategic review’ in September 2019, with a sale launched in December the same year, as it abandoned a long struggle to generate sufficient profits from the unit.”
HSBC made a loss before tax of 288 million euros for the financial year that ended Dec. 31, 2020. Reuters notes that the bank had trouble attracting bidders, who balked at the possibility of restructuring and dealing with local regulators.
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