HSBC Holdings Plc has agreed to purchase Citigroup Inc’s retail wealth management business in mainland China. This move is part of HSBC’s plan to expand its presence in the second-largest economy in the world.
The wealth management portfolio being acquired by HSBC consists of assets and deposits totaling approximately $3.6 billion from wealth customers in 11 major Chinese cities. The specific terms of the deal have not been disclosed, but it is anticipated to be finalized in the first half of 2024, according to Citigroup.
HSBC is making a concerted effort to establish itself as a prominent player in one of the world’s rapidly growing wealth markets, aligning with its broader strategy of focusing on Asia. Nevertheless, this acquisition takes place against the backdrop of concerns about the Chinese economy, including a prolonged downturn in the country’s real estate sector (which had been a significant source of wealth) and increased scrutiny of private businesses.
Nuno Matos, the CEO of Wealth and Personal Banking at HSBC, emphasized, ‘Our goal is to become the leading wealth manager in Asia, and mainland China is a key part of that vision.’
The bank headquartered in London has been working on various approaches to expand its services for wealth customers in mainland China. They have been focusing on catering to both affluent and emerging affluent individuals. HSBC, with Hong Kong as its biggest market, recently acquired the remaining 50% ownership of HSBC Life China and introduced private banking services in six Chinese cities.
On the other hand, Citigroup is in the process of scaling down its consumer banking operations in China, a decision they made public in December 2022. It’s important to note that the portfolio being sold by Citigroup does not include credit cards, mortgages, or other types of loans issued by Citi China.
