UK-based banking company HSBC is set to acquire Citigroup’s China consumer wealth management business for an undisclosed amount.
The acquisition of Citigroup’s consumer business, which manages more than $3bn in assets, is expected to boost the British lender’s business in China, reported Reuters.
The transaction is a part of the British lender’s strategy to expand in China, in line with its plans to exit less profitable geographies to focus on its operations in Asia.
It involves the transfer of a few hundred Citi staff in China, one of the key markets for HSBC, said the publication.
HSBC chairman Mark Tucker told Beijing officials in July: “An ice-breaking spirit adopted by British businesses historically would help the UK and China overcome challenges and geopolitical tensions.”
According to Reuters, Citigroup has been looking to divest its wealth management business, a part of its retail banking business, since 2021.
The business primarily serves affluent clients in China, with $3bn in consumer assets under management, and is also preparing to set up a China securities brokerage unit.
In December, Citi announced its plans to exit from China’s retail banking business, as part of its strategy to withdraw from 14 markets in Asia, Europe, the Middle East, Africa and Mexico.
Citi is preparing to close its operations in South Korea and complete the transfer of its Indonesian business to UOB Group.
Last month, the sale and migration of its Taiwan consumer businesses was completed.
HSBC already runs wealth management and private banking services in the local market.
Earlier this month, the British lender secured a fund distribution qualification granted to a foreign firm, which brings new opportunities in China’s CNY28.8 trillion ($3.94 trillion) fund market.
HSBC aims to tap its insurance brokerage network to begin sales to wealthy Chinese customers as early as next month, according to the publication.
