HSBC Holdings PLC is committed to its intention of acquiring Korea Exchange Bank (KEB), it said on Monday, but it is not prepared to wait for too long for the deal to be through. Therefore, there is little chance of the London-based bank walking away in frustration from the proposed $6.3-billion deal, although it has enough reasons to do so.

''We have extended (the acquisition deadline) until July and we are hopeful that the government will take appropriate action,'' HSBC Korea CEO Simon Cooper said, adding, ''KEB is a good fit with HSBC, offering a valuable platform and scope for growth.''

HSBC's proposed purchase of a 51.02-per cent stake in the Korean bank has been in limbo for more than eight months, leading to speculation in the media on Monday that the bank might walk away from the deal. This had led to a gain in the Korean bank's shares on speculation that HSBC's exit might initiate a bidding war among domestic banks for picking up KEB.

The South Korean regulatory authorities have still not cleared the purchase of the stake, which HSBC is buying from American private equity fund Lone Star, because of legal uncertainties over Lone Star's initial purchase of the bank in 2002.

The head of Dallas-based Lone Star's Korean unit, Paul Yoo Hoe-won, was convicted of stock price manipulation in the takeover of KEB's credit card unit in February and sentenced to a four-year jail term, while Lone Star and Korea Exchange Bank were fined $26.5 million each.

Lone Star has long battled suspicions that it was able to purchase KEB in 2003 at a bargain price after colluding with government officials to understate the bank's financial health.

Lone Star denies any wrongdoing and has countered that its rehabilitation of the once financially strapped KEB has been good for South Korea's economy.

In late April, HSBC agreed to extend the deadline for the completion of its proposed acquisition of a majority stake in KEB to 31 July from 30 April (See: HSBC gets more time to acquire Lone Star stake in Korea Exchange Bank)

South Korean President Lee Myung-bak, who took office in February, assured to boost foreign investment in the country but collapse of such a huge deal could hurt his plans badly.

His government made clear that it recognizes that the KEB deal will be seen as a litmus test of its pledge to opening up Asia's fourth largest economy to foreign investment. With senior members of the recently elected government set to visit Britain this week, the bank reportedly hopes that the official visit will be an opportunity to move things along. In this light, Cooper's statement of not waiting indefinitely may be a subtle touch of pressure.