Standard Chartered Korea, the local branch of the U.K.-based banking group, is once again facing rumors that it will pull out of the Korean market amid poor business, following the precedents of other foreign banks here.

The fact that it has been downsizing its organization by merging the bank and financial holding company further boosted such speculation. But SC Korea denied the rumors, claiming that its top priority is to improve profits here and maximize its forte in wealth management.

SC Korea gave its final approval earlier this week for its financial holding company to be merged with its bank, according to officials.


“With the due internal process completed, we have applied for the preliminary approval of the Financial Supervisory Service,” said the company’s spokesperson.

SC Financial Group Korea has been reducing the size of its business, merging its fund service into the bank in September last year and selling off its savings banks and capital affiliates in January this year.

Over the past years, a number of foreign banking groups withdrew from the Korean market due to poor business performances. U.K.-based insurer Aviva Group, for example, sold off its 47.3 percent stake in Woori Aviva Life Insurance and exited Korea last year.

But SC Korea’s performance has recently rebounded, showing signs of recovery, according to officials.

SC Bank achieved a net profit of 32.5 billion ($29 million) in the first quarter, up from the 28.6 billion won deficit in the same period last year.

“The termination of the holding company system was in line with the global trend of downsizing financial organizations,” said the spokesman, denying that the merger hinted at an upcoming business withdrawal.

“We have been working on the plan for over two years, aiming to cut down costs and to maximize operating efficiency, which means that we intend to carry on business here.”

He also referred to Citibank Korea, another key foreign bank here, which decided to abolish its holding company last year.

The bank president Park Jong-bok, who took office earlier this year, had reiterated that the company has no plan to pull out of Korea or even to downsize its banking unit.

“I hope that the appointment of a Korean head will wipe out such talks (on exiting or downsizing),” he told reporters in February.

Park, who succeeded Northeast Asia regional head Ajay Kanwal, became the first Korean national to head the organization since SC stepped into the local market back in 2005.

By Bae Hyun-jung (tellme@heraldcorp.com)