HSBC is to shutter retail banking and wealth management services in South Korea, starting from 8 July, the Hong Kong/London-listed banking group said late last week, confirming media speculation in late 2012 that it was contemplating the cutback.

The bank said it will seek regulatory approval for the move.

The cutback, part of a broad cost-cutting drive initially announced in May 2011, covers 52 closures and disposals, and withdrawals from 17 markets, the bank said. The firm, which logged a large first-quarter jump in group profits this year, is embarking on a broad restructuring of its worldwide operations.  

(The affected business has no connection to HSBC’s private bank, an entirely separate business.)

“HSBC remains committed to South Korea as it plans to focus on its core global banking and markets (GBM) business, where the HSBC group’s unrivalled global network and international connectivity provide competitive advantages for its South Korean corporate clients,” a statement from the firm said.

“HSBC will continue to serve existing retail customers until further notice, and will endeavour to minimise inconvenience to its existing retail banking customers,” it said.

“However, the bank will no longer be accepting new retail customers, except where HSBC has contractual distribution obligations with third parties. The bank makes every effort to support impacted customers and staff through a smooth transition process. Customers and staff will be notified of their options and any action or response required of them in a timely manner,” it added.

As reported earlier this year, HSBC logged a pre-tax profit of $8.5 billion for the first quarter, which was a 95 per cent rise from last year’s profit of $4.3 billion for the same quarter.

The bank is not the only financial services firm to retreat from South Korean territories. Goldman Sachs has announced it is pulling its asset management business out of the highly competitive market, after just five years, because the business did not live up to expectations, as reported by WealthBriefingAsia.