HSBC's French retail subsidiary is currently the subject of a final round of negotiations which could see the bank sold for the symbolic value of just €1, according to reports.
Reuters reported last night that one un-named interested party has stipulated the British bank must first inject more than €500m into the struggling business before any deal is completed.
Accountants Lazard are advising HSBC on the process of selling HSBC France, which consists of around 270 branches and a staff of around 10,000.
The price is going to be disastrous for HSBC."
One of the two buyers believed to remain at the table is Cerberus, an American private equity firm specialising in "distressed investing."
Negotiations are understood to have stalled for much of the past year as would-be buyers baulked at the expensive restructuring that would be needed, and complex demands from French and European regulators following any deal.
HSBC France, which has been operating since 2005 when HSBC acquired French bank CCF, has more than 850,000 clients, many of whom are expats.
An HSBC insider told Reuters all interested French banks, including Société Générale, have "walked away" from the sale dossier. The source said "The price is going to be disastrous for HSBC."
HSBC France posted a loss of €22m in 2019, down from a profit of €45m in 2018.
The sale or disposal of under-performing elements of HSBC's global business is central to CEO Noel Quinn's deep overhaul outlined early this year, involving the loss of 35,000 jobs worldwide.
Other markets being considered for sale or closure are believed to include Turkey, Malta, Greece, Oman and the United States. Despite US-China tensions, HSBC continues to generate the bulk of its profits in China and Hong Kong.
Should the sale of HSBC France fall through, it would represent a considerable setback to Quinn's remit of reducing HSBC's underperforming businesses around the world. One option that has been mooted is the creation of a ring-fenced "bad bank" to house unwanted assets and businesses.
Another option would be the retail arm becomes digital-only, with all branches closed.
HSBC's investment arm in Paris, which is not for sale, is cutting 1 in 3 markets jobs, it was reported in July.
Separately, HSBC's shares rose by more than 10% yesterday following news that its largest shareholder, Chinese insurer Ping An, has increased its stake in the bank to 8%. HSBC's share price rise represents the biggest one-day increase since 2009.