HSBC could drop 40 French corporate clients as part of cost cuts

HSBC Holdings plc is exploring whether to cut ties with dozens of French companies as part of its sweeping global restructuring.

The lender’s French unit may drop 40 businesses, according to an internal document prepared by external consultants and seen by Bloomberg News. The plan would shrink its French corporate client base by a fifth.

The proposed reductions aim to refocus the division on the most profitable clients and groups that use a wider range of the bank’s services. They would reduce revenue by 6.7% and cut risk-weighted assets in France by a third, or €3.5bn.

Europe’s biggest bank is in the midst of a worldwide overhaul announced by chief Executive officer Noel Quinn in February that aims to cut 35,000 jobs by 2022.

HSBC has focused particularly on shrinking in France, where it aims to cull a third of its nearly 700 investment-banking staff including almost all its Paris-based bankers working on structured derivatives products, Bloomberg has reported. HSBC’s French retail arm is also up for sale.

The internal document projects cutting 60% of the local research team and focusing its coverage on large-cap companies. Sales and capital markets teams are also set to be affected. For its corporate finance activities, which includes mergers and acquisitions, HSBC intends to keep some senior bankers in Paris, while more junior staff will work from London.

The internal document was drafted by Ipso Facto, a consultancy working for the bank’s employee representation body. It is designed to help frame negotiations with management on job cuts. Talks ended a week ago and the final plan will soon be communicated to employees.

HSBC and Ipso Facto declined to comment.