HSBC Holdings Plc, Europe's largest bank, extended a deadline for buying control of Korea Exchange Bank as South Korean regulators withhold approval of the nation's biggest foreign acquisition.

The deadline was extended to July 31 from today, HSBC said yesterday in a statement. The US$6.02 billion purchase of Lone Star Funds' 51-percent stake in Korea Exchange Bank has been stuck in legal limbo since September amid a criminal probe into Lone Star.

HSBC targeted Korea Exchange, the nation's sixth-largest bank, as part of a push to boost revenue in Asia after US subprime mortgage losses crimped earnings.

The fate of the deal may shape perceptions of South Korean hostility toward overseas investors that President Lee Myung Bak, two months into the job, is seeking to dispel.

"This can be seen as the barometer for the Lee administration's commitment to attracting foreign investment," said Kim Sang Jo, a professor of international trade at Hansung University in Seoul. "But it won't be easy for Lee to meddle with the ongoing legal procedures."

Lone Star's two-year effort to sell Korea Exchange has been held up by a probe into the circumstances of its purchase of the bank in 2003. In November 2006, Lone Star scrapped a sale of its Korea Exchange stake to Kookmin Bank because of the legal dispute.

The purchase price remains unchanged, adjusted for Korea Exchange's 2007 dividend, the statement said.