On 22 February 1999 a memorandum of understanding was signed by the Government of Korea and HSBC Holdings plc (HSBC) with respect to the proposed acquisition of a controlling interest in Seoul Bank by HSBC.

Subsequently HSBC has undertaken due diligence on Seoul Bank and there have been detailed and constructive negotiations regarding the terms of such transaction.

The Government of Korea and HSBC have now mutually agreed that, in view of the fact that it has not proved possible to agree to terms acceptable to both parties, the negotiations should be discontinued and that the transaction should not proceed.

HSBC remains committed to developing its business in Korea and to its relationships with Korean corporate, institutional and personal customers worldwide.

The Government of Korea recognises the support that the HSBC Group has given and continues to give to Korea and looks forward to strengthening this relationship.

* Please refer to the attached file for details.