HSBC Continental Europe has entered a memorandum of understanding (MOU) concerning the potential divestment of its French life insurance business, HSBC Assurances Vie (France), to Matmut Société d’Assurance Mutuelle.
The move is part of HSBC’s simplification process under new CEO Georges Elhedery. Through the overhaul, the bank looks to create a more agile organisation to speed up delivery, while focusing on businesses with the greatest growth prospects.
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This potential sale would involve a cash transaction of €925m ($964.3m) and is estimated to result in a pre-tax loss of around €0.1bn for HSBC Continental Europe.
HSBC Assurances Vie (France) is a provider of life insurance solutions, having over €20bn in outstanding assets, a net income of €77m and a Solvency II ratio of 287% in 2023.
As part of the proposed transaction, HSBC Continental Europe would establish a long-term partnership with Matmut, allowing HSBC Global Asset Management (France) to continue its collaboration with HSBC Assurances Vie (France).
The existing distribution arrangements of HSBC Assurances Vie (France) would remain unchanged.
The MOU also covers details of the information and consultation processes of the companies and their employee works councils, due to begin soon.
A binding sale and purchase agreement may be sealed if these processes are finalised. The completion of the potential deal is anticipated in the second half of 2025, contingent on regulatory and competition approvals.
