HSBC Holdings has said that it plans to exit retail banking and wealth management in South Korea, the bank’s latest move to rid itself of inefficient businesses.
HSBC will eliminate around 230 jobs as it winds down those operations but will continue to operate its more-profitable investment banking business in South Korea, a spokeswoman said.
KDB Financial Group, one of South Korea’s biggest banking groups, had been in talks last year to buy HSBC’s South Korean retail banking business, which HSBC deemed non-core in early 2012. But discussions ended in July last year because KDB Financial didn’t want to take on all of HSBC’s employees as part of the deal.
HSBC has struggled with retail banking in South Korea, where domestic banks tend to dominate a competitive market. Citigroup has been an exception, expanding its retail customer base after it bought KorAm Bank in 2004.
HSBC’s announcement comes just weeks after it revealed a new spate of cost-cutting measures. In mid-May, it said it will cut another 14,000 jobs worldwide to improve shareholder returns and adapt to a tougher economic and regulatory landscape. Banks are battling ever-higher costs as regulators push them to hold more reserve capital, while shareholders increasingly demand more dividends