HSBC could divest French business

HSBC is mulling over a sale of its French banking business and other underperforming operations as part of its new plans to derive 60 percent of its earnings from emerging markets, according to analysts.HSBC has raised its targets for emerging markets growth in a strategy update that follows pressure from Knight Vinke, the activist investor that has accused the bank of a lack of focus and neglecting its traditional strengths in high-growth emerging economies in Asia and elsewhere Knight Vinke has been particularly critical of HSBCs acquisition in 2003 of Household, a US subprime lender whose bad debts have soared as borrowers defaulted on mortgages.HSBC also signalled that any business delivering returns on capital below the group average of 16 percent would be placed under review, although it has not formally confirmed this strategy change.The personal financial services and small business banking operations in France, estimated to be worth about £2 billion ($4.2 billion) and based around the acquisition several years ago of Crdit Commercial de France (CCF), are thought to be vulnerable to a divestment move.It is not clear whether the HSBC private banking business in France will be able to keep critical mass without the CCF-based operation.Analysts also suggest that HSBCs businesses in Malta, Canada, Australia and Bermuda and its regional banking operations in the US could also be put up for sale