HSBC to Sell Korean Branches on Restructuring, MoneyToday Says
The London-based lender aims to sell its entire 11 branches in South Korea, leaving only investment and corporate banking businesses in Asia’s fourth-biggest economy, the Korean-language internet newswire reported today, without saying how much the assets may be worth. Jessica Lennon, a spokeswoman for HSBC in Hong Kong, declined to comment on the report by phone.
HSBC, which plans to eliminate 30,000 jobs by the end of 2013, said last month that it is in talks to sell its U.S. credit card and retail services. Foreign financial firms operating in South Korea have faced setbacks recently, with Standard Chartered Plc (STAN)’s local unit closing branches following a worker strike, and Lone Star Funds’ planned sale of Korea Exchange Bank (004940) postponed because of legal action.
HSBC’s South Korean business posted net income of 293.5 billion won ($245 million) last year, with 24.4 trillion won in consolidated assets, according to data on its website. It employed about 840 staff in Korea as of Dec. 31, the data show.
The British bank abandoned a $6 billion deal in 2008 to buy Korea Exchange Bank from Dallas-based Lone Star after failing to persuade the U.S. fund to cut the price while regulators held the deal in limbo, citing legal disputes involving Lone Star.
The same legal issues are now holding up Lone Star’s attempt to sell KEB to Hana Financial Group Inc. Regulators have delayed approval of the transaction until the end of a court case against Lone Star and its former local unit head on stock manipulation charges. Lone Star has denied wrongdoing.
Standard Chartered’s South Korean banking unit suspended 43 branches in July as its employees went on strike over the company’s plan to base pay on performance. It had reopened 14 branches as of Sept. 19, the company said this week.
To contact the reporter on this story: Seonjin Cha in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: Chitra Somayaji at email@example.com