HSBC Set to Announce Sale of French Retail Unit to Cerberus

HSBC Holdings Plc is set to announce the sale of its French retail unit to private equity firm Cerberus, putting an end to a lengthy sale process that began more than 18 months ago.

The transaction has been agreed, and is expected to be announced in the coming days, people familiar with the matter said, asking not to be identified discussing private matters.

A meeting with HSBC’s union representatives about the bank’s French retail banking activities is scheduled for Friday, a spokeswoman for the bank said, declining to comment further. A spokesperson for Cerberus didn’t immediately respond to a request for comment.

The sale is part of the bank’s worldwide overhaul that aims to reduce gross risk-weighted assets by more than $100 billion and cut 35,000 jobs, while shifting its investment focus towards Asia. The bank has already said it is exiting mass-market retail banking in the U.S. to focus on offering banking and wealth management services to an international customer base of about 300,000 wealthy clients.

HSBC’s French retail business employs about 3,900 people. The lender has also been cutting back in other areas in France, cutting a third of its nearly 700 investment-banking staff last year, including almost all its Paris-based bankers working on structured derivatives products.

It also severed ties with nearly 40 corporate clients and announced cuts to its commercial banking, central and IT operations last year.

HSBC’s retail business will be the latest addition to Cerberus’s investments in banking, which include stakes in Deutsche Bank AG, Commerzbank AG and Hamburg Commercial Bank in Germany, as well as My Money Bank, which it bought in France in 2017.

HSBC, which started to prepare the sale of its unprofitable French retail bank in September 2019, struggled to find a buyer given the complexity of the deal that included questions around financing the unit’s capital needs. The process saw other lenders such as Societe Generale SA and La Banque Postale SA show interest before walking away. Buyout firm Anacap also left the process earlier this year.

Lazard advised HSBC on the sale.

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