Citigroup to sell China consumer wealth business to HSBC. On Monday, Asia-focused HSBC Holdings Plc (HSBA.L) was informed by Citigroup Inc (C.N) that it had reached an agreement to purchase Citigroup’s China consumer wealth portfolio, which includes customers, assets under management (AUM), and deposits.

The transaction, which includes about $3.6 billion in deposits and investment AUMs, is anticipated to be completed in the first half of 2024. The transaction’s financial specifics were kept confidential. The U.S.-based bank stated, “Today’s announcement advances the wind-down of Citi’s consumer banking business in China, which was announced in December 2022.”

To overhaul its worldwide strategy, Citi initially disclosed its intention to leave China’s consumer banking in April 2021. With options for deposits, funds, and structured products, the consumer banking sector mostly catered to wealthy customers.

The acquisition of Citi’s consumer wealth division in China by HSBC, first announced by Reuters late last month, will significantly expand the London-based bank’s operations in the second-largest economy in the world. Chinese banks and international competitors, such as Standard Chartered (STAN.L), who all have more retail branches handling wealth management, dwarf Citi’s consumer banking operations in China.

As the largest lender in Europe pledges to withdraw from less lucrative regions to concentrate on Asia, its main source of income, acquiring Citi’s wealth portfolio will assist HSBC in growing its position in China, one of its important markets.

According to a statement released by the bank on Monday, HSBC may now offer wealth management solutions, mobile funds, insurance solutions, and insurance solutions in mainland China based on the regulatory licenses it has received recently.

In January, it was revealed that HSBC had made a strategic investment in Shanghai MediTrust Health Technology Co. Ltd.

According to a statement from HSBC, almost 35% of the $27 billion in net new invested asset inflows in Asia for the first half of 2023 came from locations outside of Hong Kong, an increase of 21% year over year. According to the bank, the agreement with HSBC excludes Citi’s institutional operations. It also stated that it would continue to meet the requirements of wealthy Chinese clients through its regional wealth centers in Singapore and Hong Kong.

Citi reported that it has finalized sales in eight regions after declaring its plan to depart consumer banking across 14 markets in Asia, Europe, the Middle East, and Mexico as part of its strategic reorganization. In addition to the consumer banking agreement with China, the bank statement stated that Citi planned to sell its Indonesian consumer business by the end of the year.

Citi’s consumer business in Korea and its overall operation in Russia are now being wound down, as previously disclosed. Additionally, Citi has disclosed that it intends to pursue an IPO for its Mexican consumer, small business, and middle-market banking operations.