Financial News
Written by: Kuang Yueting
2021-06-18 22:24
Last update date: 2021-06-18 22:24
HSBC (0005) announced the sale of French retail banking business.
HSBC Continental Europe (HBCE) has signed a memorandum of understanding with Promontoria MMB SAS (My Money Group), its subsidiary Banque des Caraïbes SA (buyer) and My Money Bank for the sale of French retail banking business. HBCE transfers net assets to the buyer Related businesses worth approximately US$2 billion at a consideration of 1 Euro (US$1.22).
The transaction is expected to be completed in the first half of 2023. HSBC estimates that the sale will result in a loss of approximately US$2.3 billion before tax, plus an impairment of US$700 million in goodwill. The combined common equity Tier 1 capital ratio will fall by approximately 15 basis points. It will be accounted for in phases from this year to 2023.
After the completion of the transaction, the HSBC Group's tangible net asset value (including estimated losses but excluding impairment of intangible assets) is expected to decrease by approximately US$2.2 billion.
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3900 employees transferred with related businesses
HBCE has a total of 244 retail branch networks. As of December 31 last year, it has provided services to 800,000 customers, with customer loan balances of US$26.2 billion, customer deposit balances of US$23.1 billion, and risk-weighted assets of US$7.1 billion; it is expected to be approximately 3,900 HBCE employees will be transferred with related businesses in accordance with relevant laws.
HSBC Chief Executive Officer Qi Yaonian said that the sale of the French retail banking business will allow the company to significantly streamline its business in the European continent and accelerate the pace of transformation of the European wholesale banking business. The company is committed to maintaining HSBC's position as the leading international wholesale bank in the European continent and leveraging the Group’s The global network provides external and internal services to multinational customers.
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