HSBC has agreed to sell its French retail banking arm to My Money Group, a company backed by private equity firm Cerberus.
The transaction has been agreed, wrapping up an 18 month effort by HSBC to shed the struggling business as it shifts its investment focus to Asia.
My Money Group on Friday announced the deal, in which it will acquire 244 retail branches, around 3,900 employees and €24bn in assets. The firm was optimistic about the crowded French retail banking market, and said the combined businesses would create “an exciting and diverse challenger bank.”
“Our aim would be for the bank to return to profitability, three years after we have taken control of it,” My Money chief executive Eric Shehadeh told Reuters.
The deal is the latest step in HSBC’s global positioning overhaul, as it aims to cut gross risk-weighted assets by more than $100bn and cut 35,000 jobs. The British bank has been retreating from European and North American markets, where it’s struggled to compete with larger domestic banks.
HSBC announced it was exiting US mass-market retail banking at the end of May, to focus on banking and wealth management centres in 20-25 international “wealth centres”, where 300,000 key high net worth clients are based.
The British bank had already begun retreating in France last summer, when it cut a third of its 678 investment banking staff, including almost all of its Paris-based bankers in the structural derivatives department.
US-based private equity firm Cerberus bought My Money Bank in France in 2017. The new deal is the latest addition to its European investments, which include stakes in Deutsche Bank and Commerzbank.
The transaction is expected to close in the first half of 2023.