Oct. 11 (Bloomberg) -- KDB Financial Group Inc. is in talks with HSBC Holdings Plc to buy its retail banking operations in South Korea, a person with direct knowledge of the matter said.
Purchasing HSBC’s 11 Korean branches is one way that KDB, a state-run South Korean financial group, could grow its deposit base, according to the person, who declined to be identified as the discussions are private.
KDB executives contacted HSBC and formed a team to review a takeover of the branches, Seoul Economic Daily reported yesterday, citing unidentified financial industry officials. The newspaper didn’t mention a purchase price.
Park Chan Ho, a spokesman for Seoul-based KDB, declined to comment on the potential purchase when asked by telephone. Laine Santana, a spokeswoman for HSBC in Hong Kong, said in an e- mailed response that the London-based bank’s policy is not to comment on market speculation.
HSBC, which plans to cut 30,000 jobs by the end of 2013, is selling assets as the euro-area debt crisis saps profit and regulators demand thicker capital buffers. Foreign financial firms operating in Korea have faced setbacks this year, with Standard Chartered Plc’s local unit temporarily closing branches following a worker strike, and Lone Star Funds’ planned sale of Korea Exchange Bank delayed because of legal action.
HSBC’s South Korean business posted net income of 293.5 billion won ($252 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.
--With assistance from Stephanie Tong in Hong Kong. Editors: Russell Ward, Chitra Somayaji
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