HSBC to exit retail banking in South Korea amid profitability concerns

HSBC, Europe's biggest bank, will further scale down its South Korean operations next week by closing its retail business, following the sale of its insurance business in April.

The bank will shut 10 of its 11 branches in the country and axe 230 staff.

The outlook for consumer banking in South Korea remains a concern to firms there. Standard Chartered said earlier that it had seen a decline in asset quality in the country and would reassess the value of its goodwill.

HSBC said it "remains committed to South Korea" but would now focus on its global banking and markets business, the group's investment banking arm. It said it would seek regulatory approval for the closure.

A Hong Kong-based HSBC spokeswoman said the lender would continue to develop custody, payment and cash management, trade services, foreign exchange services and project and export financing in South Korea.

A person familiar with the situation said HSBC's retail business in South Korea had been profitable overall despite recording losses in one or two years, but "the group questioned if the profits were sustainable". HSBC will no longer accept new retail customers in South Korea.