A wave of consolidation sweeping South Korea's banking industry is fuelling speculation that Standard Chartered may want to take the opportunity to exit Asia's fourth-largest economy and recoup its record $3.3 billion investment.
When foreign banks rushed into the Korean market in the wake of the Asian financial crisis, they were widely expected to take a bigger slice of the country's profitable wealth management businesses and high-end retail banking sector from top local banks such as KB Financial Group and Shinhan Financial Group.
But StanChart's Korean unit, SC First Bank Korea, has never been a major threat to savvy home-grown banks in the competitive consumer lending or credit card segments. SC First Bank's limp profit growth, recent restructuring and first dividend payout has further stoked persistent market talk that the London-based bank may consider an exit from the saturated Korean market.