Here is a further illustration of the damage that zero rates cause to retail banking, in France and around the world. In 2000, when the Sino-British banking mastodon HSBC wanted to buy Crédit Commercial de France (CCF), it was in competition with the Dutch ING and had to put 11 billion euros on the table. Twenty years later, while it is trying to get rid of it, the sale price is "close to zero" according to Les Echos.

Renamed HSBC France, we are still talking about 800,000 customers with an above-average level of income and assets, major industrialists, 300 branches and 5,000 employees. At the time the sixth largest bank in France, CCF was positioned at the top end of the market, much more profitable than the big battalions of network banks.

However, the purchaser will first have to incur restructuring costs that have become necessary for the network and for a departure plan for 500 employees (200 to 300 million euros), as well as for the IT migration (100 million euros). Certainly, but these customers bring in money.  But that was before, at a time when real interest rates were positive and wealthy and affluent customers were bringing in mountains of cash that the bank was putting back into the markets to pocket substantial revenues. It was back in the days when credit was good, when borrowers paid 5, 6, or 7% annual interest on money that the bank had in its accounts, or on the market at 2 or 3%, which made for a nice interest margin, as they say. This has now disappeared with the zero rates that have invaded our financial world. HSBC France has announced a loss of 39 million euros for 2019.

All the French banks have looked at the file but only two of them have shown interest: Société Générale and Banque Postale. The first has nevertheless embarked on a program to sell several subsidiaries (Norway, Bulgaria, Serbia, Poland, South Africa), unless it is a question of refocusing on the national territory. The second would then have its own banking network and a high-end customer base, perfectly complementary to its post offices. This is, of course, the offer that is favoured by the employees of the former CCF, whereas Société Générale is already engaged in a program to restructure its own network (closure of 500 branches between 2015 and 2020).

This emblematic case does not only concern France, of course, and the HSBC group has just announced its intention to cut 35,000 jobs worldwide, i.e. 15% of its workforce, after a 53% drop in its net profit in 2019. All the banks are affected by this crushing of their interest margin, all are suffering and are reducing their workforce.

Let us suggest an idea to the banks to get out of this zero interest rate stranglehold, at least in part: offer and encourage their customers to acquire physical gold, which will provide them with sales commissions, and at the same time rid their customers of some of their liquidity, which they don't know what to do with and which ends up costing them money. But it's probably too disruptive for them to think about...