KDB Financial Group has been in talks with HSBC to take over the foreign bank’s Seoul branch, according to a news report on Sunday.

The KDB refused to reveal details.

“It is true that we are moving to acquire a bank. But it is uncertain at the current stage as to whether it (M&A target) will be HSBC,” a KDB spokesman told The Korea Herald.

Speculation had it that HSBC will close down its retail business operations in Korea in the coming month.

The report came hours after the KDB Financial Group chief vowed to buy a local bank as part of efforts to privatize the group and beef up its competitiveness.

“KDB Financial is ready to seek mergers and acquisitions at any time if there is a suitable target,” Kang Man-soo, chairman of KDB Financial Group, said in an interview.

Kang said that as there is a counterparty in any takeover deal, it would be difficult for him to specify the name of a target bank, hinting that the group is pushing to buy a lender in Korea.

The Financial Services Commission, the nation’s financial regulator, scrapped a plan to sell Woori Finance to KDB Financial Group in mid-June, due to public criticism. A takeover of a bank is critical for KDB Financial Group because the group needs to expand its deposit base before privatization.

The government, which owns 100 percent of the group, must start reducing its stake no later than May 2014 under the current blueprint for KDB’s privatization.

Kang, a former finance minister, has been strongly supportive of creating a gigantic financial firm or so-called mega financial institution through takeovers in a bid to secure the group’s competitiveness in the global market.

By Kim Yon-se and Yonhap News
(kys@heraldcorp.com)