HSBC takes $3bn hit to exit French retail business

HSBC is taking a $3bn hit to exit its French retail banking network, selling the business to US private equity group Cerberus. The transaction with Cerberus will see HSBC book a pre-tax loss of roughly $2.3bn alongside a $700m charge relating to impairment of goodwill, the bank said in a statement on Friday. Critics say HSBC neglected the brand and failed to invest enough in the business, prompting Cerberus to demand investment from HSBC during the sale negotiations that have been continuing since late last year. Cerberus, which created MyMoneyGroup after buying General Electric's French consumer credit business in 2016, will also spend €200m "Overhauling digital architecture" of CCF. The plan is to return the business it is buying from HSBC, which had a pre-tax loss of €236m last year, to profit over the next three years and target a double digit return on equity, said Shehadeh. HSBC's exit from the French retail market is likely not the last by foreign banks.

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