HSBC Holdings Plc has agreed to acquire Citigroup Inc’s consumer wealth portfolio in China, including clients, assets under management and deposits, the two banks announced on Monday.
The deal, which covers total deposits and investment AUMs of about $3.6 billion, is expected to close in the first half of 2024. The financial terms of the transaction were not disclosed.
The move is part of Citi’s global strategy to exit its consumer banking business in 14 markets, including China, where it mainly served rich clients with deposit, fund and structured product offerings. Citi first announced its plan in April 2021 and has now closed sales in eight markets.
The acquisition will help HSBC expand its presence in China, one of its key markets and its main revenue generator in Asia. HSBC can now provide wealth management solutions and mobile fund and insurance solutions in mainland China, thanks to its recent regulatory approvals and strategic investment in Shanghai MediTrust Health Technology Co. Ltd.
HSBC recorded $27 billion in net new invested asset inflows in Asia for the first six months of 2023, up 21% year on year, and more than 35% of the value originates from outside Hong Kong.
Citi said it would continue to serve the needs of affluent to ultra-high net worth Chinese clients via its regional wealth hubs in Singapore and Hong Kong. It also said it would retain its institutional businesses in China.