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By Maya Nikolaeva and Pamela Barbaglia
PARIS/LONDON, Dec 18 (Reuters) - The banking arm of French
mail operator La Poste is exploring a bid for HSBC
France's retail activities as part of its diversification
efforts, sources with knowledge of the matter told Reuters.
La Banque Postale is working with Barclays
to carry out preliminary work on HSBC's French
retail business ahead of an auction process which is due to
start next year, the sources said, speaking on condition of
anonymity.
The move comes just weeks before a complex merger between
state-backed La Poste and CNP Assurances is due to close
speeding up La Poste's plans to diversify away from its
shrinking mail business.
La Banque Postale and Barclays declined to comment while
HSBC only confirmed that its retail banking activities in France
were being reviewed.
HSBC is working with Lazard to prepare the sale of its 270
retail branches in France as interim chief executive Noel Quinn
wants to reduce costs across the banking group.
The auction is expected to draw interest from a handful of
French banks, the sources said.
Unlike La Banque Postale, most French lenders are wary of
scaling up their retail networks due to a general fall in
profitability for retail banking in Europe.
"La Banque Postale is a strong candidate," one of the
sources said, adding its ongoing merger with CNP Assurances was
close to the finishing line and would not prevent the company
from pursuing another transformational deal.
The merger with CNP Assurances will happen through
state-owned investment fund La Caisse des Depots et
Consignations, or CDC, which owns minority stakes in both La
Poste and CNP Assurances.
French watchdog AMF said in June it had authorized both CDC
and the French government to transfer their combined 42% stake
in CNP Assurances to La Poste's banking arm La Banque Postale.
Barclays and Lazard worked on the deal representing La Poste
and CDC, respectively.
HSBC France boss Jean Beunardeau told French staff in
December that while carrying out a strategic review the bank had
"started a dialogue with financial institutions" which could be
interested in the business, according to an email seen by
Reuters.
He added the strategic review included HSBC's operations
targeting small and medium-sized enterprises.
(Reporting by Maya Nikolaeva in Paris and Pamela Barbaglia in
London; additional reporting by Lawrence White,
editing by Alexandra Hudson)
