(Adds background, HSBC comment)
By Carolyn Cohn and Aftab Ahmed
NEW DELHI, Dec 23 (Reuters) - HSBC is buying the
mutual fund arm of India's L&T Finance Holdings for
$425 million, it said on Thursday, as it looks to build up its
wealth business in Asia.
Under a strategy spearheaded by Group CEO Noel Quinn, HSBC
is ploughing $3.5 billion into its wealth and personal banking
business - including asset management - in line with its
ambition to become Asia's top wealth manager by 2025.
HSBC intends to merge L&T Investment Management Limited
(LTIM) with its $1.6 billion asset management operation in
India, HSBC and L&T said in separate statements.
"Combining LTIM with our existing Indian asset management
business gives us the scale, reach and capabilities to capture
some of the 15-20% annual asset management market growth
expected in India over the next five years," Quinn said in an
HSBC statement.
L&T Investment Management Limited has assets under
management of over 800 billion Indian rupees ($10.65 billion).
The deal will make HSBC a top 10 asset manager in India,
Nuno Matos, HSBC's CEO of wealth and personal banking, told
Reuters.
Asia is the biggest region for HSBC, and the wealth and
personal banking unit contributed 44% or $22 billion to the
London-headquartered lender's adjusted global revenue last year.
HSBC said in August it was buying French insurer AXA's
Singapore assets for $575 million.
HSBC could make more purchases in the region, Matos said.
"Most of our growth will be organic ... but we continue to
look for bespoke acquisitions to improve our capabilities and
improve our scale."
Dinanath Dubhashi, managing director and CEO of L&T Finance
Holdings, said the HSBC deal was in line with L&T's aim of
"unlocking value" from its subsidiaries, adding this would help
it to strengthen its balance sheet for its lending business.
J.P. Morgan and Citi were the financial advisers to L&T.
($1 = 75.1020 Indian rupees)
(Reporting by Aftab Ahmed in New Delhi and Carolyn Cohn in
London
Editing by Alexander Smith and Mark Potter)