We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HSBC in Advance Talks to Sell French Operations at a Loss
Read MoreHide Full Article
Per a Reuters report, HSBC Holdings (HSBC - Free Report) is in advance talks to divest its French business, which has roughly 270 retail branches, at a loss. This business restructuring plan is part of the company’s efforts to streamline operations and improve operating efficiency.
Last October the company had reviewed and announced plans to sell its France-based retail unit. For this, HSBC began working with Lazard (LAZ - Free Report) to find a prospective buyer.
Nonetheless, the bank is finding it difficult to garner sufficient interest for the unit. This is mainly owing to large scale restructuring necessary there and also for complicated regulatory requirements.
Now, the company is left with two bidders, U.S.-based Cerberus and an investment firm. These investors are ready to buy the business for symbolic €1 after HSBC infuses more than €500 million ($582.7 million) into it.
Notably, the French unit has been unprofitable for sometime, and the company is under pressure to do away with such businesses soon. While HSBC is trying to reach an agreement by the year end, adding fresh capital in to the unit will likely lead to huge loss.
The bank had announced its latest round of business restructuring initiatives in February, before put them on hold amid the coronavirus crisis. Later in July, it resumed the process, which is aimed at reshaping underperforming businesses, simplifying complex organization and reducing costs.
As part of the restructuring plan, HSBC aims to save $4.5 billion expenses by 2022 and shed $100 billion of RWAs by shrinking the U.S. and European operations, along with scaling back investment bank business.
Also, almost 35,000 job cuts are expected as part of the plan. With French retail business employing around 3,000 workers, the divestiture of the same is important to the company.
Shares of HSBC have lost 49% so far this year compared with 37% fall for the industry it belongs to.
Currently, HSBC carries a Zacks Rank #5 (Strong Sell).
Several other global banks including Credit Suisse, UBS Group (UBS - Free Report) , NatWest Group and Deutsche Bank (DB - Free Report) are undertaking measures to improve efficiency and save costs. These banks are resorting to branch closures, job cuts and divestiture of less profitable units to streamline their businesses.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
HSBC in Advance Talks to Sell French Operations at a Loss
Per a Reuters report, HSBC Holdings (HSBC - Free Report) is in advance talks to divest its French business, which has roughly 270 retail branches, at a loss. This business restructuring plan is part of the company’s efforts to streamline operations and improve operating efficiency.
Last October the company had reviewed and announced plans to sell its France-based retail unit. For this, HSBC began working with Lazard (LAZ - Free Report) to find a prospective buyer.
Nonetheless, the bank is finding it difficult to garner sufficient interest for the unit. This is mainly owing to large scale restructuring necessary there and also for complicated regulatory requirements.
Now, the company is left with two bidders, U.S.-based Cerberus and an investment firm. These investors are ready to buy the business for symbolic €1 after HSBC infuses more than €500 million ($582.7 million) into it.
Notably, the French unit has been unprofitable for sometime, and the company is under pressure to do away with such businesses soon. While HSBC is trying to reach an agreement by the year end, adding fresh capital in to the unit will likely lead to huge loss.
The bank had announced its latest round of business restructuring initiatives in February, before put them on hold amid the coronavirus crisis. Later in July, it resumed the process, which is aimed at reshaping underperforming businesses, simplifying complex organization and reducing costs.
As part of the restructuring plan, HSBC aims to save $4.5 billion expenses by 2022 and shed $100 billion of RWAs by shrinking the U.S. and European operations, along with scaling back investment bank business.
Also, almost 35,000 job cuts are expected as part of the plan. With French retail business employing around 3,000 workers, the divestiture of the same is important to the company.
Shares of HSBC have lost 49% so far this year compared with 37% fall for the industry it belongs to.
Currently, HSBC carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Several other global banks including Credit Suisse, UBS Group (UBS - Free Report) , NatWest Group and Deutsche Bank (DB - Free Report) are undertaking measures to improve efficiency and save costs. These banks are resorting to branch closures, job cuts and divestiture of less profitable units to streamline their businesses.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>