HSBC Holdings Plc, Britain's biggest bank, agreed yesterday to pay about 6.3 billion U.S. dollars for 51 percent of Korea Exchange Bank, the nation's sixth-largest lender.

"It would provide HSBC with a significant presence in Asia's third-largest economy," HSBC Chairman Stephen Green. Seoul-based Korea Exchange Bank, controlled by United States buyout firm Lone Star Funds, has more than 350 branches and operations in 18 countries.

HSBC Chief Executive Officer Michael Geoghegan turned to Asia to drive growth amid rising bad debts from subprime borrowers at its U.S. unit and slower growth in Europe, according to Bloomberg News.

Standard Chartered Plc trumped HSBC in January 2005 when it agreed to buy Korea First Bank for 3.3 billion dollars. In February 2004, Citigroup Inc agreed to buy Koram Bank for 3.18 trillion won in cash.

"Strategically it makes sense," said Derek Chambers, a London-based analyst at Standard & Poor's Equity Research, who has a "hold" rating on HSBC stock. "Korea is a large market and HSBC has been trying to get into it in various ways."

Korea Exchange said on Aug. 10 that second-quarter profit dropped 56 percent to 277 billion won (300 million dollars) as it booked fewer gains from asset disposals. The purchase will add to earnings in the first full year of operations, HSBC said yesterday.

Dallas-based Lone Star, led by John Grayken, raised 1.19 trillion won in July selling a 13.6 percent stake in Korea Exchange Bank, seven months after scrapping the sale of its controlling interest.

HSBC said on July 30 that first-half net income rose 25 percent to 10.9 billion dollars, helped by gains in China. The company gets almost half of its pretax profit from Asia.