Two people said that HSBC (HSBA.L) will purchase Citigroup’s (C.N.) China’s consumer wealth management unit, which handles more than $3 billion in assets, boosted the London-based bank’s China operation.
One source stated that Asia-focused HSBC would take over “a few hundred” of Citi’s China-based workers. The financial specifics were not disclosed. The two individuals, who were not authorized to speak to the media, said the agreement might be disclosed next month.
Citi and HSBC declined to comment. HSBC is expanding in China, one of its core markets, as Europe’s largest lender exits less profitable countries to focus on Asia, its income generator.
Due to sluggish economic development and increased national security constraints on data transfers, fewer Western banks are expanding in China.
A bank statement said that HSBC’s chairman Mark Tucker told Beijing authorities in July that British firms’ “ice-breaking” mentality will assist the U.K. and China overcome obstacles and geopolitical issues.
The bank, which already offers wealth management and private banking in China, received a first-ever fund distribution certification for a foreign business last month, opening up new potential in China’s 28.8 trillion yuan ($3.94 trillion) fund market. The second person added that HSBC plans to start fund sales to rich Chinese next month through its insurance brokerage network. Citi’s China wealth management operations, which it has been planning to depart since 2021, provide wealthy clients in the world’s second-largest economy with deposits, funds, and structured products.
Chinese and global counterparts like Standard Chartered have more retail outlets handling wealth management than its $3 billion in consumer assets under management. The first source stated the bank’s private banking services for high-net-worth Chinese clients outside China are unaffected. Citi is also applying to open a China securities brokerage.
Citi announced in December that it would sell some portfolios as it winded down its China retail banking business and exit from consumer franchises in 14 Asian, European, Middle Eastern, African, and Mexican areas. Citi will close its South Korean unit and transfer its Indonesian business to UOB Group. The sale and relocation of its Taiwan consumer businesses was completed in August.
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