HSBA Hsbc Holdings Plc

By Simon Clark 

HSBC Holdings PLC is in exclusive talks to sell its unprofitable French retail bank to New York-based private-equity firm Cerberus Capital Management LP as part of a global reorganization of its operations, the bank told employees this week.

HSBC, which once marketed itself as the world's local bank, is withdrawing from retail banking in France as it scales back in Europe and North America and boosts its presence in Asia, where it makes most of its profit. The London-based bank also is considering selling its unprofitable U.S. retail-banking network.

Cerberus plans to combine HSBC France with My Money Group, a French lender it acquired in 2017 from General Electric Co., according to a message Jean Beunardeau, the head of HSBC's Continental European operations, sent to French employees and reviewed by The Wall Street Journal.

"Discussions are still ongoing and are expected to be for some weeks to come, and these may or may not lead to a transaction," Mr. Beunardeau wrote. The proposed transaction includes HSBC's French retail-banking and wealth-management operations but not its insurance and asset-management operations, according to the message. HSBC may continue to distribute insurance and asset-management products through the French bank after the sale, Mr. Beunardeau said.

European banks are selling or closing operations in an effort to boost profitability. In December, HSBC rebranded its French unit as HSBC Continental Europe and combined it with operations in Belgium, Spain, Italy and other nations. The sale would unwind a continental expansion that took root in 2000 with HSBC's $10.6 billion takeover of Credit Commercial de France, which it won in a bidding war with Dutch lender ING Groep NV.

Cerberus, which manages about $50 billion, previously acquired Austria's Bawag Group and Germany's Hamburg Commercial Bank and bought stakes in Deutsche Bank AG and Commerzbank AG.

Cerberus was competing for HSBC France with AnaCap Financial Partners Ltd., a London-based private-equity firm that specializes in financial companies, according to people familiar with the situation. AnaCap planned to combine the HSBC unit with the French retail operations of Barclays PLC, which it acquired in 2017. AnaCap rebranded the Barclays assets as Milleis Banque SA.

(END) Dow Jones Newswires

March 17, 2021 13:08 ET (17:08 GMT)

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