HONGKONG and Shanghai Banking Corporation Ltd has been in talks on the possible purchase of a majority stake in the Korea Exchange Bank, the sixth-largest bank by assets in the Republic of Korea, parent HSBC Holdings said yesterday.
The stake may be bought from US private equity funds Lone Star, the bank said in an announcement to Hong Kong Stock Exchange, confirming media reports.
Discussions on the possible purchase were ongoing, and if HSBC and Lone Star reach an agreement, the transaction would have to be approved by regulatory authorities in the ROK and elsewhere, according to the announcement.
Established in 1967, the Korea Exchange Bank currently operates in more than a dozen countries and regions. Its assets totaled US$91 billion, and it posted a net profit of more than US$1 billion.
The bank was established as a government-owned entity specializing in foreign exchange and was privatized in 1989. It suffered losses in the financial crisis in the late 1990s but managed to expand its equity capital by attracting a huge investment from Lone Star.
Earlier reports in the ROK's media quoted sources as saying that HSBC and Lone Star planned to sign a deal soon.