KDB to snap up HSBC’s retail unit before IPO

Korea Development Bank announced yesterday it is officially on track to acquire the retail banking business of HSBC Korea as soon as possible as it tries bulk up before its initial public offering, which is planned for later this year.

In a statement, the state-owned bank said it signed a memorandum of understanding with the Seoul unit of the multinational financial group yesterday to acquire all 11 of its branches, as well as its deposits and a corresponding amount of secured loans in HSBC’s retail banking business through a purchase-and-assumption agreement.

The agreement stipulates KDB buy all assets and assume full liability for HSBC Korea’s retail banking business within the boundaries of the deal.

Because the Korean bank is not only acquiring the assets but also the liabilities of HSBC’s retail business, no additional payment will change hands. KDB said the current agreement includes no separate fee for management control.

By Lee Jung-yoon [joyce@joongang.co.kr]