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(Alliance News) - HSBC Holdings PLC on Monday declared the acquisition of Citigroup Inc's consumer wealth management portfolio in China to be a "milestone" on the road to building its wealth capabilities in Asia.
Citigroup announced it agreed to sell its onshore consumer wealth portfolio in China to HSBC Bank China, an arm of the London-based, Asia-focused lender.
The New York-based retail, commercial and investment bank said the portfolio sale includes clients, assets under management, and deposits, for a total value of around USD3.6 billion.
The terms of the transaction were not disclosed. The deal is expected to close in the first half of 2024, Citi said.
HSBC said it will integrate the business into Bank China's Wealth & Personal Banking Operations. It plans to extend offers to in-scope employees who are supporting the business in China.
The FTSE 100 constituent said the acquisition forms part of its organic and inorganic efforts to "scale up its capabilities and deepen coverage" of mainland China wealth customers.
"These include the acquisition of the remaining 50% stake in HSBC Life China for full ownership, the launch of Global Private Banking across six cities in mainland China, and the ongoing buildout of a team of more than 1,400 Pinnacle mobile wealth planners," HSBC explained.
HSBC's chief executive officer of Wealth & Personal Banking, Nuno Matos, described mainland China as "central to [HSBC's] 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. It accelerates the positive momentum we've set...We are excited by the opportunities that lie ahead," Matos said.
David Liao, HSBC Asia Pacific co-CEO, said the deal was "a testament to [HSBC's] confidence in the country's long-term economic development".
Shares in HSBC were down 0.8% at 649.20 pence each in London on Monday morning.
Meanwhile, Citi said the sale was part of its "broader global strategy refresh", and progresses the planned wind-down of its consumer banking business in China. The transaction does not include its institutional businesses in the country, Citi noted.
"Citi will continue to serve the needs of affluent to ultra-high net worth Chinese individuals through its regional wealth hubs in Singapore and Hong Kong leveraging its International Personal Bank and Citi Private Bank businesses," the US bank confirmed.
Citi previously announced its intention to exit consumer banking in 14 markets across Asia, Europe, the Middle East and Mexico. It has closed sales for eight of these markets, including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand and Vietnam.
It is planning a sale of its Indonesian consumer banking business later in the year, and is progressing the previously-announced wind-downs of its Korean consumer banking business and overall presence in Russia. Citi said it is also pursuing an initial public offering of its consumer, small business and middle market banking operations in Mexico.
By Elizabeth Winter, Alliance News senior markets reporter
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