HSBC set to move into S Korea with £1.7bn deal

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The Independent Online

HSBC, the world's third-largest bank, was poised to finally take a foothold in the South Korean banking market yesterday, as it emerged it was in talks to buy the controlling stake of Korea First Bank (KFB), in a deal worth up to 3.5 trillion Korean Won (£1.7bn).

HSBC, the world's third-largest bank, was poised to finally take a foothold in the South Korean banking market yesterday, as it emerged it was in talks to buy the controlling stake of Korea First Bank (KFB), in a deal worth up to 3.5 trillion Korean Won (£1.7bn).

The news emerged from Kim Kyo-Shik, the secretary general of South Korea's public fund oversight committee, which approves the sale of government-owned shares.

KFB, South Korea's eighth-largest bank, is owned jointly by the South Korean government and Newbridge Capital, an Asian private equity group.

Speaking to a UK news agency yesterday, Mr Kyo-Shik said he was aware that negotiations between HSBC and Newbridge were under way.

Under the terms of Newbridge's purchase of its controlling 48.6 per cent stake in the bank, five years ago, the Korean government has agreed that it will also sell its own stake once Newbridge has made its disposal. The Korea Deposit Insurance Corporation, a government agency, owns 48.5 per cent of the company, with the Seoul finance ministry holding the remainder. Mr Kyo-Shik said: "I was told talks haven't made big progress yet. Talks are taking place overseas. Newbridge will not officially notify us of the sale until certain progress is made."

HSBC and Newbridge declined to comment on whether talks had begun yesterday.

The bid is HSBC's third attempt to buy a bank in South Korea. It is also its second attempt to buy KFB.

Earlier this year, Citibank, the world's largest bank, bought KorAm Bank for $2.7bn (£1.5bn).

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