HSBC Holdings Changes Classification of French-Unit Sale on Potential Delay, Collapse

   By Ian Walker

HSBC Holdings PLC said Friday that the sale of its French retail banking business will be reclassified in its accounts, with a subsequent reversal of the $2 billion impairment in its first quarter earnings, due to uncertainty that the deal will complete.

HSBC said that if the sale doesn't complete by May 31, 2024 then the agreement will terminate automatically, although that date can be extended through to Nov. 30, 2024 under certain circumstances.

"The French retail business continues to be managed as part of the group, and were the transaction not to complete, there would be no material impact on guidance or performance at the group level," HSBC said.

The issue arose after the buyer informed HSBC that the rise in interest rates in France and the subsequent fair value account treatment on the acquisition will increase the amount of capital needed once the deal is closed. This would therefore impact its ability to get regulatory approval for the deal unless it is addressed.

Shares in London at 1218 GMT were up 17.90 pence, or 3.2%, at 585.20 pence.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

April 14, 2023 08:48 ET (12:48 GMT)

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