Standard Chartered returned to the acquisition trail in Asia, considering a bid for a South Korean investment bank and agreeing to buy into an Indian retail brokerage.
The Asia-focused UK bank was said to be in talks to pay up to $260m for Hannuri Investment & Securities, a deal that could help drive its flagging wholesale banking business for corporate and financial clients in Korea.
Korea is Standard Chartered's fourth-largest market after it bought Korea First Bank in 2005 for $3.3bn in its biggest ever acquisition. The UK bank had a disappointing first half in Korea, with wholesale banking profit falling 36 per cent as income dropped and costs rose.
Korea is a tough banking market with strong local lenders and powerful international players such as Citigroup and Goldman Sachs. Standard Chartered could soon face increased competition from HSBC, which is in talks to buy into Korea Exchange Bank, the country's biggest trade finance and foreign exchange bank.
The country's booming economy is being fuelled by trade with China, where HSBC and Standard Chartered are fierce competitors for corporate banking business.
Simon Maughan, an analyst at MF Global Securities, said: "So far, growth in the Korean market has been disappointing for Standard Chartered. A potential acquisition of a securities business in Korea would be an important step for improving client relationships and cultural understanding of the market."
Hannuri was established in 1995 as Hannuri Salomon Securities. Its business includes equity and fixed income sales, corporate finance, merger and acquisition advice and derivatives trading. The company is unlisted and is 93 per cent owned by foreign investors, the biggest of which is JDK Investment of the US.
Standard Chartered makes almost all its profit in Asia, Africa and the Middle East and has made a series of acquisitions in recent years to expand in key markets. Yesterday the London-based bank announced a deal to buy 49 per cent of India's UTI Securities for $36m in cash with an option to buy the business outright by 2010.
UTI sells broking, wealth management and investment banking in 60 cities in India, where Standard Chartered is the biggest international bank. UTI will boost Standard Chartered's wealth management and private banking businesses.Reuse content