HSBC to acquire Citi’s retail wealth management business in China

Share

Share

HONG KONG — HSBC on Monday announced it is acquiring competitor Citigroup’s retail wealth management business in China, as the U.S. bank continues to wind down the Asian consumer franchise business.

The London-headquartered bank is taking a $3.6 billion portfolio from Citi, which includes deposits and other assets in mainland China but excludes credit cards, mortgages, and other loans, HSBC said in a statement.

The transaction value was not immediately clear. Citi told Nikkei Asia that it had not disclosed details including the price tag, while HSBC did not immediately respond to a request for comment on the cost from Nikkei Asia.

Citi said late last year that it was looking to shed its consumer banking business in China as part of a regional withdrawal from the sector, which began two years ago.

The move comes as HSBC builds up its wealth business in China. The bank said in the announcement that expects the number of adults in the country with at least $250,000 in net wealth to double to around 351 million by 2030.

“Mainland China is central to our ambition to be the leading wealth manager in Asia. This investment will allow us to further build out our core wealth business in HSBC Bank China,” Nuno Matos, CEO of wealth and personal banking at HSBC, said in the statement.

Citi’s retail wealth management business in the world’s second-largest economy will be incorporated into HSBC’s wealth and personal banking operations in the country. HSBC’s wealth and personal banking in China has recorded a pretax loss every first half of the year since 2020.

For the first six months of this year, it racked up a $12 million loss, smaller than a $38 million loss in the same period last year. Globally, the same business sector recorded strong growth by delivering $8.6 billion in pretax profit in the first half, up 344% from the same period in 2022.

HSBC has also beefed up other channels to tap wealthy Chinese consumers, including the acquisition of the remaining 50% stake in HSBC Life China, and running a fund joint venture to sell retail mutual funds.

Citi, on the other hand, is exiting its consumer franchise business in China to focus on its institutional business. It is also ramping up efforts to capture high net worth and ultrarich clients in China via Hong Kong. In November, it opened the first Citi Global Wealth Centre in an iconic Hong Kong shopping mall located in an area popular with mainland visitors.

In early June, six months before Citi’s announcement about winding down its China consumer business, the U.S. bank’s CEO, Jane Fraser, became the first foreign executive to meet with Li Yunze, the head of the newly formed National Financial Regulatory Administration, the powerful watchdog for China’s banking and insurance sector. Fraser said in the meeting that the bank is committed to expanding in China, according to an announcement from the Chinese regulator.

In April 2021, Citi announced that it would exit 14 consumer markets in Asia, Europe, the Middle East, Africa, and Mexico. In Asia, Citi completed the sale of its Taiwan consumer banking business to DBS Bank in August last year. Singapore’s United Overseas Bank also announced in January last year a plan to acquire the U.S. bank’s unsecured and secured lending portfolios, wealth management, and retail businesses in Thailand, Malaysia, Indonesia, and Vietnam for about 4.9 billion Singapore dollars ($3.6 billion).

Share

Latest

Related Content

Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

Media Kit

    Data Protection

    The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

      Error: Contact form not found.

      The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

      COVID-19
      Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

      Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

      The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

      Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

      Request Nomination Pack

      Error: Contact form not found.