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HSBC eyes a major expansion in China with a reported move to acquire Citigroup's consumer wealth management business, which manages over $3 billion in assets.
According to Reuters, the financial aspect of the acquisition is not yet known as of this time. Then again, it could be a large amount as this deal will allow HSBC to take over several assets and properties of Citigroup China’s consumer wealth unit, including its existing employees.
Unnamed sources further shared that there is a possibility that HSBC and Citigroup may announce the acquisition as early as next month. The report stated that it could not divulge the identification of two sources as they are not authorized to speak to the media.
HSBC’s Expansion in China
HSBC and Citigroup have not yet commented on this report, but they are expected to do so once the deal is sealed. In any case, this buyout is seen as one of The Hongkong and Shanghai Banking Corporation’s strategic moves to expand its business in China.
This country is said to be one of HSBC’s key markets after it started pulling out its less profitable units to focus on Asia, which is its main revenue generator. Citi Bank China’s consumer wealth management business is part of its retail banking division, which it has been trying to close since 2021.
As part of its expansion plans, HSBC also purchased its JV partner’s stake in HSBC Jintrust Fund Management in May. The fund management firm is HSBC’s joint venture with Shanxi Trust, and initially, it owned 51% of Jintrust, which has been acquired now by the London-based bank making it the sole owner today.
Citigroup Sells Its Retail Wealth Unit
As per Bloomberg, HSBC continues to build its presence in China, and the sale of Citigroup’s consumer wealth management division opened a new opportunity for the former to achieve its expansion ambition here.
Citi has been selling some of its businesses as it tapered off its retail banking business in the country. This is said to be part of a plan to exit from consumer franchises in about 14 markets, including Europe, Asia, Mexico, and the Middle East.
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