My Money, backed by Cerberus, acquires French retail bank HSBC


  • HSBC ends long struggle to quit retail in France
  • Cerberus seizes European banks
  • My Money to revive the old CCF brand

LONDON / PARIS, June 18 (Reuters) – HSBC has agreed to sell its French retail bank to My Money Group, which is backed by private equity firm Cerberus, ending a long effort by the UK bank to divest activity in difficulty as it focuses on Asia.

The deal announced by My Money on Friday sees HSBC (HSBA.L) take another important step in a wider withdrawal from slow-growing European and North American markets where it has battled larger domestic players.

Meanwhile, Cerberus continues to grab banks in Europe, where the US-based private equity fund already has stakes in Deutsche Bank (DBKGn.DE) and Commerzbank (CBKG.DE). Read more

The deal will see My Money acquire all 244 HSBC branches, approximately 3,900 employees and € 24 billion in assets, suddenly creating what My Money has described as a new bank challenger in the retail banking landscape. crowded from France.

“Our goal would be for the bank to return to profitability, three years after taking control,” My Money chief executive Eric Shehadeh said in a statement.

HSBC stock was down 1.8% at 12:36 GMT, after slipping ahead of the formal announcement of a deal that had already been widely publicized.

RETURN OF THE CCF

My Money has announced that it will resurrect the Crédit Commercial de France (CCF) brand, which HSBC bought for some € 11 billion 21 years ago as it tried to gain a foothold in one of the largest markets from Europe. It also plans to invest 200 million euros in the technological infrastructure of the HSBC unit.

Under French law, both parties must consult with employees on the deal, and if HSBC and My Money decide to proceed, it could be signed in the third or fourth quarter of this year, with completion expected in 2023.

HSBC will retain other parts of its French business, including its investment and merchant banking units.

The deal marks HSBC’s second exit from a large Western market this year after selling off its US retail banking business, as chief executive Noel Quinn cuts losses in markets where HSBC has long struggled for be profitable.

Low interest rates from central banks and competition from domestic players have combined to make traditional retail deposit taking businesses unattractive in many developed markets in recent years, especially where banks are small. .

HSBC put its distribution business in France under “strategic review” in September 2019, with a sale launched in December of the same year, as it gave up a long struggle to generate sufficient profits from the unit.

The company recorded a pre-tax loss of 236 million euros for the fiscal year ended December 31, 2020, according to the My Money press release.

HSBC has struggled to generate interest, with bidders worrying about the heavy restructuring it supposedly needed and complicated discussions with local regulators. The French banks, which first studied the file, all withdrew.

Reporting by Lawrence White and Gwenaelle Barzic; Editing by Sudip Kar-Gupta

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