HSBC (HSBA.L) France is moving out of its prestigious headquarters on Paris’s Champs Elysees avenue in an emblematic move ahead of the planned sale of its retail business in the country, two sources familiar with the matter said.
The exit and planned sale, following a strategic review of the group’s French retail activities, are part of a broader cost cutting effort under interim Chief Executive Noel Quinn.
HSBC France sold its headquarters at 103 avenue Champs Elysees, and a building in front of it at 15 rue Vernet, to Qatari investors back in 2009, and has rented them since then.
The buildings house a total of around 1,700-1,800 employees, according to a union source.
“Our lease has expired and we will communicate our plans with our employees soon,” a spokeswoman for the bank said.
On the one hand, the owner wants to take back control of the two buildings, and on the other hand, HSBC needs to save money, one source familiar with the matter said.
Another source confirmed the departure, adding “it’s very expensive” to rent the buildings.
Office rents in Paris are rising to levels not seen since at least 2003, according to Immostat data, as vacancy rates are at record lows.
HSBC inherited the historic headquarters when it bought the French retail operations of Crédit Commercial de France (CCF) in 2000.
At the beginning of the 20th century, the building was a hotel where World War One spy and exotic dancer Mata Hari was arrested.
HSBC Holdings has hired U.S. investment bank Lazard Ltd (LAZ.N) to sell its French retail business, a source close to the matter told Reuters on Tuesday.
Quinn is expected to unveil the first details of his strategic overhaul of the bank when it reports third quarter earnings on Oct. 28.
Quinn is auditioning for the full-time CEO job and insiders said he is under pressure to take decisive action after Chairman Mark Tucker indicated his predecessor John Flint had not moved quickly enough to turn around the lender’s performance.
