29th Feb 2008 11:00
HSBC Holdings PLC29 February 2008 HSBC RECEIVES FIRM OFFER FOR REGIONAL SUBSIDIARIES IN FRANCE HSBC France SA ("HSBC France"), a wholly-owned subsidiary of HSBC Holdings plc("HSBC"), has received a firm cash offer of EUR2,100 million (US$3,171m^) forits seven French regional banking subsidiaries (the "Regional Banks") fromBanque Federale des Banques Populaires. On the basis of this offer, HSBC France has entered into exclusive discussionswith Banque Federale des Banques Populaires. Groupe Banque Populaire is a Frenchbased universal multi-brand mutual banking group. Banque Federale des BanquesPopulaires is the central body of the Groupe Banque Populaire which coordinatesthe activities of its members. The Regional Banks of HSBC France are: Societe Marseillaise de Credit; Banque deSavoie; Banque Chaix; Banque Marze; Banque Dupuy, de Parseval; Banque Pelletier;and Credit Commercial du Sud-Ouest. Stephen Green, HSBC Group Chairman, said: "France is a market which offers significant opportunities for HSBC in GlobalBanking and Markets, private banking, asset management, insurance, personalbanking, especially Premier, and commercial banking, through our HSBC-brandedretail network. In particular, the more international nature of these businessesfits our stated strategy to focus our developed market operations oninternational connectivity. "The Regional Banks are predominantly local franchises in Southern France whichhave operated under their own brands and with decentralised management. Thesebanks have strong local roots and benefit from excellent franchises which wouldfit extremely well in an organisation focused on the French domestic market. "Banque Federale des Banques Populaires has outlined a strategy for the bankswhich would make it a good owner for both customers and staff with a strongrespect for the traditions of the banks. "This offer is an opportunity for HSBC to redeploy capital to other investmentsas we pursue our strategy and rebalance our activities towards emerging marketsand faster growing business segments." HSBC-branded branches in France, which are concentrated in France's major urbancentres and provide strong coverage of the Greater Paris area and HSBC's GlobalBanking and Markets, private banking, commercial banking, asset management andinsurance activities are unaffected by the offer. Philippe Dupont, Chairman and Chief Executive Officer of Groupe BanquePopulaire, said: "The seven Regional Banks of HSBC France are a unique opportunity in France,given the location of their branch networks and their client bases. Thisacquisition allows Groupe Banque Populaire to improve its growth prospects inretail banking and is fully in line with the Group's strategic objectives. Weintend to retain the brands of the Regional Banks and their individualidentities. Groupe Banque Populaire has a proven track record of successfulintegrations which respect both management and staff." As at 31 December 2007, under IFRS accounts, the aggregate total assetsattributable to the Regional Banks were EUR8,380m (US$12,654m^) withshareholders' equity of EUR564m (US$852m^). In the year ended 31 December 2007,the Regional Banks generated net profits after tax of EUR100m (US$151m^). TheRegional Banks have 400 branches (excluding nine HSBC-branded branches which arenot included in the offer) and employ some 2,950 people. The Regional Banksaccount for under 40 per cent of HSBC's personal customers in France and, in2007, generated less than 20 per cent of the pre-tax profits of HSBC France. The proposed price represents a multiple of 21.0 times 2007 earnings after tax and a multiple of 3.7 times the shareholders' equity as at 31 December 2007. HSBC France will consult with representatives of the relevant employeerepresentative bodies before making any final decision. Any transaction will besubject to regulatory approvals in France. Completion would occur within sixmonths. HSBC Global Banking and Markets and Goldman Sachs International are acting asfinancial advisers to HSBC. Footnote ^ The amounts set out in US$ have been translated based on an exchange rate of $1.51 for €1.00. Notes to editors: 1. Groupe Banque PopulaireGroupe Banque Populaire is a universal multi-brand mutual banking group. Itcomprises 20 Banques Populaires as well as the Credit Maritime Mutuel and themutual guarantee companies. With over 7,000,000 customers and approximately2,900 branches, Groupe Banque Populaire is one of the major retail bankinggroups in France: it holds strong positions on the personal banking, smallbusinesses and SMEs markets. As one of the two strategic shareholders of Natixis(of which Groupe Banque Populaire owns 34.6%), the Group also provides investmentservices to institutional and corporate clients. Besides, Groupe BanquePopulaire is active in the field of real estate services through its subsidiaryFoncia. In 2006, Groupe Banque Populaire generated €8.1bn net banking income and €1.7bnnet profits after tax. On 30 June 2007, the Group, with over • 20bn equity andtotal assets amounting to €305bn, ranked within the 15 largest banks in the Eurozone. 2. HSBC Holdings plcHSBC Holdings plc serves over 125 million customers worldwide through around10,000 offices in 83 countries and territories in Europe, the Asia-Pacificregion, the Americas, the Middle East and Africa. With assets of some US$2,150billion at 30 June 2007, HSBC is one of the world's largest banking andfinancial services organisations. HSBC is marketed worldwide as 'the world'slocal bank'. 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