HSBC has withdrawn from its proposed £3.3 billion acquisition of a majority stake in Korea Exchange Bank (KEB).
Europe’s largest bank began its negotiations to purchase 51% of KEB from US private equity firm, Lone Star, last autumn.
The proposed transaction has been bogged down in legal and regulatory issues for some months and at the beginning of August, HSBC said it needed to review the price because shares in KEB had fallen by around 12% since September 2007.
HSBC now says that recent changes in asset values in world markets mean that the move would not be in the best interests of shareholders, on the terms negotiated last year.
The group is, however, still keen to continue its expansion in emerging markets and in particular, Korea’s fast-growing financial services market.
For the time being, HSBC says its focus on developing its existing operations in the country.