HSBC was considering selling its retail banking business in France. Today, Noel Quinn, the British bank's interim CEO, has decided that the situation is unacceptable and wants to bring new blood to the British group.
Net losses in 2018 and 2019
HSBC entered the retail market in 2000 with the takeover of Crédit Commercial de France (CCF), and today has around 250 branches throughout France for almost 800,000 customers. However, due to unfavorable conditions on the financial markets (Brexit, low rates...), the bank's retail division recorded a loss of 55 million euros in 2018. At the time, it announced plans to cut 4,000 jobs, or almost 2% of its total workforce. But in August 2019, when HSBC parted company with CEO John Flint and appointed Noel Quinn as interim CEO, another decision emerged to sell HSBC France's retail banking business. In 2019, HSBC France announced another net loss, this time of €39 million.
Lack of profitability is the main reason for this decision. In addition to a major restructuring project designed to generate further savings, it is estimated that some 35,000 jobs will ultimately be lost within the British group.
Who will buy HSBC France?
With around 800,000 customers and 5,000 employees in France, 250 branches and assets of between 7 and 15 billion euros, the stakes are high, not to mention the retail banking, private banking and insurance businesses, which account for up to 10 million euros in assets/customer, and part of the SME banking business, which represents up to 30 million euros in sales.
Buying a hard bank means buying liabilities. Restructuring costs must be taken into account. Crédit Mutuel Alliance Fédérale, the Crédit Agricole group, BPCE and BNP Paribas have all declared that they are not candidates for such a takeover. Many banks feel that this is a transaction for the past, and that it will not help to modernize their network. Today, only Banque Postale and Société Générale are candidates, and they have reportedly offered a very low price.
The other major challenge of the retail bank takeover is social. Many banks have already embarked on downsizing plans, and will have to take on thousands of new employees, bearing in mind that the wage bill is not well defined.