HSBC Holdings PLC has mandated U.S.-based investment bank Lazard Ltd. to launch a sale process for its retail division in France, Reuters reported, citing a source close to the matter.

The sale is part of HSBC CEO Noel Quinn's plan to reduce costs across the banking services group, the report said.

The auction is expected to begin in the coming weeks with confidential information to be distributed to interested parties so that they can carry out due diligence on the business, according to the source.

HSBC has conducted a strategic review of the retail unit, which employs up to 3,000 people out of the British lender's total of 8,000 staff in France. Analysts and bankers have estimated the business to be worth roughly €1 billion, Reuters wrote.

Meanwhile, banking sources told the newswire that the sale faces complications from a decline in retail profitability for European lenders, due to low-interest rates.

Lazard is expected to gauge interest from French banks, including BNP Paribas SA, Société Générale SA and Crédit Mutuel Group — which is a tough proposition considering the lenders are in no hurry to boost their local presence, according to Reuters' sources.