HSBC has quashed speculation it will pursue acquisitions in South Korea, arguing that it could achieve better returns from organic growth than from deals in Asia's fifth-largest economy.
The bank, the world's third-largest by market capitalisation, yesterday ruled out bids for either Korea Exchange Bank, South Korea's fifth-largest lender, or LG Card, the country's largest credit card group.
Stephen Green, HSBC chief executive, said: "We are not looking at acquisitions - we are not looking at Korea Exchange Bank." The surprise statement came weeks after HSBC lost out to Standard Chartered in the battle for Korea First Bank, the country's eighth-largest lender, and places the bank's Korea strategy at loggerheads with its fiercest rivals in Asia.
Citigroup, the world's largest financial services group, last year established its presence in Korea with the acquisition of Koram for $2.7 billion (€2 billion).
HSBC executives yesterday suggested prices of banks in Korea were too high. Instead, the bank will beef up its investment in consumer finance and wholesale banking products for mid-sized Korean companies operating overseas, but did not say how much it planned to spend.
"We believe that direct investment in South Korea offers greater potential returns than those available by acquisition," Mr Green said.
