HSBC France sale to land this month, AnaCap goes back up against Cerberus

Written by Ruby Hinchliffe
17th February 2021

HSBC, which has been preparing to sell its French retail banking activities unit for more than a year, has told employees it will act by 23 February, according to Les Echos.

Cerberus Capital Management, a New York-based private equity firm, was tipped to purchase the struggling operations which lost the bank €499 million euros in the first half of 2020.

The French unit moved to the shelf back in September 2019

But per Les Echos sources, it seems AnaCap Financial Partners – a European mid-market investor based out of London – has re-entered the auction race with “a strong comeback”.

Les Echos says the British fund has the backing of BNP Paribas’ investment bank. “The fund more than ever intends to win,” says the report. AnaCap is also already a shareholder in Milleis, which was formerly Barclays France.

Some 4,000 to 5,000 employees will be affected by HSBC’s French sale. The banking network comprises of 270 retail branches in France. Its auctioning off is part of chief executive Noel Quinn’s strategy to slash costs.

Of the nearly half a billion euros the French operation lost the bank in first half of 2020, the majority leaked out of its private banking and wealth management division.

On the shelf since 2019

The French unit moved to the shelf back in September 2019. A year later, Reuters reported that the two final bidders – Cerberus and an unidentified firm, likely AnaCap – would pay a symbolic one euro in return for its recapitalisation by the bank of €500 million.

At this point, French banks interested in the sale had walked away as had other international bidders. Reuters put this down to the “heavy restructuring assumed to be necessary and complex talks with local regulators”.

“The price is going to be disastrous for HSBC,” one source told Reuters last year.

In July 2020, HSBC France said it was seeking to cut 255 of 678 jobs in its French global banking and markets unit by the end of 2021.

Also reported by Les Echos, the French subsidiary integrated several European branches due to Brexit. However, the bank did not completely follow its initial ambitions to transfer 1,000 bankers from London to Paris.