HSBC considers closing South Korean retail business
HSBC Holdings is considering shuttering its South Korean retail operations, the Yonhap news agency reported, citing unidentified industry officials and regulators.
Europe’s largest lender by market value is reviewing options for the unit, Hyonjin Suh, a Seoul-based HSBC spokeswoman, said in an e-mailed response to questions, declining to elaborate. The review follows a collapse of takeover talks with KDB Financial Group in July.
HSBC’s exit would end 14 years of retail banking in Korea as chief executive Stuart Gulliver comes under pressure to revive profitability. The London-based bank plans to cut costs by as much as US$3.5 billion by next year and boost returns by selling assets. Last week, the lender said it’s in talks to divest its US$9 billion stake in Ping An Insurance, China’s second-largest insurer.
“We continue to review our options regarding our operations,” Gareth Hewett, a Hong Kong-based spokesman at HSBC, said in an e-mailed statement. “Korea remains an important market for HSBC; we continue to invest in developing our Korean global banking and markets.”
KDB, South Korea’s largest state-owned banking group, earlier this year said it failed to reach an agreement to buy the operations from HSBC due to conditions related to employment. KDB chairman Kang Man Soo in April had agreed to buy the British lender’s assets and debt at 11 South Korean branches.
HSBC, which began business in Korea more than 100 years ago, started retail banking services in 1998, and had total assets in the country of 25 trillion won (US$23 billion) as of December 31, according to its website. The bank has been selling assets including units in Japan and Thailand to focus on faster-growing markets as it retrenches amid tighter capital rules and the sovereign debt crisis in Europe.