HSBC's planned sale of its French retail banking business to Cerberus-backed My Money Group could fail due to interest rate hikes in France that boosted the amount of capital the buyer will need, the British bank said on Friday.
planned sale of its French retail banking business to Cerberus-backed My Money Group could fail due to interest rate hikes in France that boosted the amount of capital the buyer will need, the British bank said on Friday.
Unexpected rate hikes have increased the amount of regulatory capital required by the enlarged purchaser after completion, HSBC said. HSBC announced the proposed France deal in June 2021 at a nominal price of one euro, as part of a retreat from slow-growing European and North American markets where it has struggled against larger domestic players.HSBC said that given the uncertainty over the deal closing, it had for now reversed that accounting hit, with a 0.25 percentage point boost to its core capital ratio as a result.
The French deal would see My Money acquire HSBC's 244 branches, around 3,900 staff and 24 billion euros in assets in the country, creating what My Money described in June 2021 as a new challenger in France's crowded retail banking market.
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