HONG KONG: HSBC Holdings Plc, Europe's largest bank by market value, is in exclusive talks with an unidentified property fund to sell its Paris headquarters.

The bank is in talks to sell 103 Avenue des Champs-Elysees and neighboring 15 rue Vernet to a unit of an unidentified real estate fund and lease it back for at least nine years, according to a statement released yesterday by the London-based bank.

"These discussions are ongoing and a further announcement will be made as and when appropriate," the bank said.

The lender agreed to the sale and leaseback of its main buildings in London and New York in the past six weeks, raising gross proceeds of about $1.63 billion. HSBC has reported more than $50 billion in loan losses and asset writedowns spurred by sour U.S. home mortgages and has raised more than $29 billion in capital since 2006, according to data compiled by Bloomberg.

HSBC gained ownership of the Paris properties in 2000 through its acquisition of Credit Commercial de France SA. The French bank had occupied the Champs-Elysees building, which has 357,000 square feet (33,166 square meters) of space, since the 1920s.

HSBC said in April it was considering selling the headquarters buildings in London, New York and Paris. At the time, brokers estimated the properties in the French capital might fetch as much as 500 million euros ($748 million).

HSBC slid 0.9 percent to HK$96.50, exerting the biggest drag on the Hang Seng Index yesterday.

Bloomberg News

(HK Edition 11/19/2009 page4)