* HSBC ends long struggle to exit France retail
* Cerberus snapping up European banks
* My Money to resurrect former CCF brand
* HSBC expects $2.3 billion hit from sale
(Adds HSBC to take $2.3 billion loss on French retail sale)
By Lawrence White and Gwénaëlle Barzic
LONDON/PARIS, June 18 (Reuters) - HSBC has agreed to sell
its French retail bank to Cerberus-backed My Money Group in a
deal which will mean a loss of around $2.3 billion for the
British bank but end its long struggle to dispose of the
business as it focuses on Asia.
The deal announced on Friday sees HSBC
take another significant step in a wider retreat from
slow-growing European and North American markets where it has
struggled against larger domestic players.
Meanwhile Cerberus continues to snap up banks in Europe,
where the U.S. based private equity fund already owns stakes in
Deutsche Bank and Commerzbank.
The deal will see My Money acquire HSBC's 244 branches,
around 3900 staff and 24 billion euros in assets, creating at a
stroke what My Money described as a new challenger bank in
France's crowded retail banking landscape.
"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 said in a statement.
HSBC shares were down 1.9% at 1339 GMT, after slipping ahead
of the announcement of a deal that had been widely reported.
The sale price would be a nominal 1 euro, HSBC said, adding
that the business would have a net asset value of $2 billion at
the time the deal completes, with the British bank agreeing to
make up any shortfall in that valuation if it declines.
CCF COMEBACK
My Money said it will resurrect the Credit Commercial de
France (CCF) brand, which HSBC bought for some 11 billion euros
21 years ago as it attempted to gain a foothold in one of
Europe's biggest markets. It also plans to invest 200 million
euros in the HSBC unit's technology infrastructure.
Under French law, the two parties have to consult 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 due in 2023.
Shehadeh said My Money was a "responsible employer" and that
any job cuts would not happen until 2024 or 2025.
HSBC will retain other parts of its French business
including its investment and business banking units.
The deal marks HSBC's second exit from a major Western
market this year after it sold its U.S. retail banking
businesses, as Chief Executive Noel Quinn cuts his losses in
markets where HSBC has long struggled to be profitable.
Low central bank interest rates and competition from
domestic players have combined to make traditional
deposit-taking retail businesses unattractive in many developed
markets in recent years, especially where banks are subscale.
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.
The business made a loss before tax of $288 million euros
for the financial year ended 31 Dec 2020, HSBC said.
HSBC struggled to attract interest as bidders fretted at the
heavy restructuring assumed to be necessary, and complex talks
with local regulators. French banks, which initially studied the
dossier, all walked away.
Dutch bank ING said separately it had also placed
its French retail banking business under strategic review.
($1 = 0.8427 euros)
(Reporting by Lawrence White and Gwenaelle Barzic;
Editing by Sudip Kar-Gupta and Alexander Smith)
HSBC Holdings (HSBA)