Sept. 19 (Bloomberg) -- HSBC Holdings Plc, Europe's largest bank, abandoned the $6 billion purchase of Korea Exchange Bank from Lone Star Funds after the global credit crisis slashed asset values.

HSBC exercised options to terminate the acquisition ``taking into account all relevant factors including current asset values in world financial markets,'' the London-based company said in an e-mailed statement today.

More than $5.3 trillion was wiped off world stock values this month through Sept. 17 as Lehman Brothers Holdings Inc. collapsed and the U.S. government took control of the country's biggest insurer and two biggest mortgage financiers.

Korea Exchange Bank spokeswoman Lee Nahm Yon declined to comment on HSBC's announcement. Michael Breen, president of Insight Communications Consultants which represents Lone Star in Seoul, also declined to comment.

HSBC's plan to take a controlling 51 percent stake in Korea Exchange Bank from Dallas-based Lone Star Funds has been in limbo for more than a year as regulators withhold approval. Jun Kwang Woo, chairman of the Financial Services Commission, said on Sept. 11 a ruling on the deal was unlikely this month.

Talks with Lone Star haven't led to agreement on how the transaction might proceed on a basis acceptable to HSBC, the lender said in the statement.

Korea Exchange Bank fell 3.1 percent yesterday to 12,650 won, valuing the lender at 8.16 trillion won ($7.2 billion). The shares have declined 13 percent this year.

To contact the reporter on this story: Lenka Ponikelska in London lponikelska1@bloomberg.netSeonjin Cha in Seoul at scha2@bloomberg.net