Banking: Cerberus buys French retailer HSBC

HSBC sells French retailer Cerberus

After more than two years of negotiations, British banking giant HSBC has sold its retail banking network in France for an undisclosed sum to My Money Group (MMG), a company controlled by US investment fund Cerberus.

The deal includes just under 250 branches, around 800 000 customers, 3 500 employees and the Crédit Commercial de France (CCF) brand, which was sent into HSBC's closet when it acquired the network some twenty years ago to establish itself in France. The sale is part of HSBC's strategy to refocus on Asia.

New CCF to target professional clients

The new CCF will target professional, freelance and self-employed clients, such as lawyers and doctors, with wealth of €50 000 or more. "HSBC Continental Europe (HBCE) has completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS (My Money Group), on January 1, 2024," HSBC announced in a joint press release.

MMG has been working on the new CCF for months under the auspices of Niccolò Ubertalli, a former employee of Italian bank Unicredit who was appointed CEO in January 2023. The aim is to create a "French wealth bank on a human scale" based on the CCF brand.

A financial drama with many twists and turns

The sale of HSBC's French retail banking business to My Money Group has been a soap opera with many twists and turns. The two parties first announced a memorandum of understanding in June 2021, followed by an agreement in November that year. But in the meantime, rising central bank interest rates made a deal less likely.

A new agreement was eventually announced, but the final stage of the sale was not smooth: union officials launched a warning procedure, and an administrative problem with the bank's authorization prevented union officials from being transferred to the new structure.

The CFDT went on the offensive, fearing for the future of the network. According to CFDT, three-quarters of the ATMs that would be taken out of service during the transformation would disappear. That information has not been confirmed by the company's management. The French subsidiary has also cost the vendor a lot of money, with a $2.4 billion impairment charge recorded in the third quarter of 2022.

Employees are concerned about the vagueness of the new strategy

My Money Group is incorporated in France but owned by the U.S. fund Cerberus, named after the guardian of the underworld in Greek mythology, through a company based in the Netherlands. The move to another company is as much expected as feared by employees. "Expected because only a small minority will miss HSBC, feared because we will move to a company whose commercial and strategic plans we know nothing about," says Eric Poyet, a union FO delegate.

The buyer remains fairly tight-lipped about its commercial strategy, but it has set itself a one-year moratorium. It is expected to implement a three-year recovery plan and rely on Arkéa, the Breton mutual bank, as a back office. In general, however, shareholders of this type rarely take a long-term view of things.

It's not the first time for a Cerberus fund

Cerberus is no stranger to the banking sector: in 2007, it paid €3.2 billion to acquire the former Austrian union bank Bawag, which had been in danger of bankruptcy the previous year before being floated on the stock market a decade later.

In 2015, it also acquired from the UK Treasury the mortgage portfolio of the defunct Northern Rock bank, which had been nationalized in 2008. This led to a standoff between the fund and a group of borrowers who criticized their lender for not applying new market rates that were lower than those they had signed up for.

Overall, the deal is controversial. It could lead to increased competition in the French retail banking market, but it could also lead to job cuts and a deterioration in customer service.


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