HSBC signalled that it was prepared to sell off peripheral assets today as booming annual profits were hit by a $17.2 billion (£8.7 billion) writedown on bad debts and credit losses driven by its embattled American operation.

Douglas Flint, the finance director, declined to be drawn on specific divisions that HSBC would be prepared to sell.

"There would be a number of businesses at the periphery of what we do; if somebody thought they were worth more than we do then we would clearly consider that," Mr Flint said.

HSBC has come under pressure from some shareholders, including Knight Vinke, the activist fund, to offload its American division, which accounted for $11 billion of today's writedowns following huge exposure to the downturn in the United States housing market, particularly in sub-prime mortgages.

HSBC paid about $14 billion to buy Household, a sub-prime specialist lender in the US, in 2002, but it has dramatically scaled back its presence in the country, effectively ending underwriting in the middle of last year and cutting the branch network from 1,300 to about 1,000.

Mr Flint highlighted the bank's plan to redeploy capital into emerging markets, where greater opportunities had been identified.

At the same time, HSBC proposed that Safra Catz, president and chief financial officer of Oracle Corporation, the US technology firm, join as an independent director, alongside Narayana Murthy, chairman and chief mentor of Infosys, the US listed IT consultancy.

The appointments were seen in part as a response by the bank to criticisms that some of its non-executive directors had been in place for too long. Baroness Dunn, Sir Brian Moffat and Lord Butler, long-standing non-execs at HSBC, will retire at the annual meeting.

Stuart Gulliver, the high-flying chief executive of HSBC's wholesale division and Sandy Flockhart, head of the Hong Kong and Shanghai Banking Corporation were also named to the board today.

The writedowns, which had been well-flagged by the bank, threatened to cast a pall over a 10 per cent increase in full-year group pre-tax profit to $24.2 billion. Operating income and earnings per share were all up healthily and the annual dividend was bumped up by more than 11 per cent to $0.90 a share. The cost efficiency ratio also improved, rising to 49.4 per cent, despite operating expenses soaring by 16 per cent.

Stephen Green, chairman of the bank, which employs 330,000 worldwide, bemoaned the "extraordinary strain" that had been put on the world's financial system by the credit crunch.

"Our North American results continue to be adversely affected by high loan impairment charges as we respond to the impact on our portfolio of credit deterioration arising largely from housing market weakness in the US," Mr Green said.

Mr Flint said that the year had shown "the best and worst of financial markets", pointing to the "outstanding growth" achieved by the bank in Asia, Hong Kong and the Middle East compared with the problems in the US and no sign of a let-up in the competitive UK market.

He said that HSBC now had more general exposure to the US economy rather than in specific areas such as mortgages.

Mr Flint was cautious about predicting a timeframe for a recovery in America's economic fortunes. "A year ago we would have said the end of 08 for a turnaround. Maybe it's the end of 09 now, who knows? There are as many views [about this] as there are commentators," he said.

Investors responded well to the results, sending HSBC shares surging almost 2.5 per cent higher. They were 19p higher at 785p.

Citigroup's banks analysts described HSBC's profits as "relatively comforting".

"The key concern remains the continued deterioration in credit quality metrics in the US consumer finance business," they said.

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