The portfolio comprises US$3.6 billion in assets and deposits, with customers in 11 major cities, according to a statement from the London-headquartered bank on Monday. The deal excludes Citi’s credit cards, mortgage and other loan portfolios in mainland China.
The acquired business will be integrated with HSBC’s China’s wealth and personal banking operations, the bank said. The deal is expected to close in the first half of 2024.
“Our agreement to acquire Citi’s wealth management portfolio in China is a testament to our confidence in the country’s long-term economic development,” said David Liao, HSBC Asia-Pacific co-CEO.
The bank has been making investments “across all areas” of its business in mainland China, with particular focus on fulfilling the “wealth needs” of Chinese consumers, he added.
10:45
Chinese investors offloading overseas properties
Chinese investors offloading overseas properties
Mainland China accounts for almost 50 per cent of Asia’s financial wealth, according to HSBC. The lender expects the number of adults on the mainland with at least US$250,000 in net wealth to double to around 351 million by 2030, accounting for about 31 per cent of the population.
The acquisition comes as HSBC aims to scale it coverage of its mainland China wealth customers, with a “particular focus on the affluent and emerging affluent sectors”.
Amid this rapid increase in wealthy individuals, the Greater Bay Area, comprising nine cities in China’s southern Guangdong province, Hong Kong and Macau, stands out as a unique opportunity, HSBC said.
HSBC was the first financial institution in mainland China to hold licences for both insurance brokerage and mutual fund sales. In 2020, it took full ownership of HSBC Life China to take advantage of Beijing’s new rules designed to further open up the financial services sector in mainland China.“Mainland China is central to our ambition to be the leading wealth manager in Asia,” said Nuno Matos, CEO of wealth and personal banking at HSBC, on Monday. “[This investment] accelerates the positive momentum we’ve set, scaling up our capabilities and deepening our wealth coverage.”
01:53
Inside China's Demographic Revolution
Inside China's Demographic Revolution
Citi announced its plan to exit its mainland China consumer banking business in April 2021.
The US bank said on Monday that it plans to continue to serve clients in mainland China from its wealth hubs in Singapore and Hong Kong.
“This transaction serves the interest of our clients, colleagues and all parties involved,” said Christine Lam, CEO of Citi China. “We look forward to continuing to support our institutional clients in China as their banking partner in cross border needs.”
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