HSBC sells Korean retail operations

HSBC’s international restructuring has hammered its operations in South Korea.

HSBC Holdings plc has agreed to sell its South Korean retail operations to Korea Development Bank a few days after word broke that both companies were close to a deal.

State-owned KDB is the flagship unit of KDB Financial Group and is Korea’s development financing bank charged with expediting industrial development.

KDB will take over all of HSBC’s deposits and mortgage-lending bonds and 11 branches and debts from HSBC via a purchase and assumption transaction.

By acquiring the 11 HSBC branches, KDB will bring to 76 its number of branches throughout South Korea. It plans to increase the total to 135 by 2013.

"We expect the (deal) to secure more branches and . . . eventually help the ongoing initial public offering process by boosting corporate value," KDB said.

KDB wants to strengthen its retail financing business, which is smaller than its corporate-financing and investment-banking operations, before it goes public later this year.