(Adds deal details in paragraphs 4-9)
By Lawrence White
LONDON, April 14 (Reuters) - HSBC's planned sale of its
French retail banking business to Cerberus-backed My Money Group
may fall through due to interest rate rises in France that have
boosted the amount of capital the buyer will need, the British
bank said on Friday.
Rate hikes have increased the amount of regulatory capital
required by the enlarged purchaser after completion, HSBC said.
"Unless this issue is addressed, the Purchaser
will be unable to obtain regulatory approval for the
Transaction," HSBC said.
HSBC announced the proposed 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.
The British lender said at the time it would incur a loss of
around $2.3 billion on the disposal.
Under the terms of the deal, My Money Group is required to
use its best efforts to obtain regulatory approval for the
transaction, HSBC said.
But the buyers have said they are unlikely to be able to do
this without amending the terms of the deal, HSBC added.
If it does proceed, it is likely to be delayed, HSBC said.
"HSBC remains committed to pursuing the sale providing
appropriate terms can be agreed," it said.
(Reporting by Lawrence White
Editing by Mark Potter)
Messaging: @ReutersLawrence))
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