HSBC Expands Presence in China with Acquisition of Citigroup’s Consumer Wealth Portfolio

HSBC Holdings Plc, the London-based bank, is set to expand its presence in China with the acquisition of Citigroup Inc’s consumer wealth portfolio. The deal, which includes clients, assets under management, and deposits, is expected to close in the first half of 2024. The total deposits and investment AUMs involved in the transaction amount to approximately $3.6 billion.

Citigroup had previously announced its plan to exit consumer banking in China as part of a global strategy revamp. The consumer banking business primarily served affluent clients with deposit, fund, and structured product offerings. The sale of its China consumer wealth business to HSBC marks another step in Citi’s wind-down of its consumer banking operations in the country.

HSBC’s acquisition of Citi’s wealth portfolio will significantly boost its business in China, one of its key markets. As Europe’s largest lender, HSBC aims to focus on its key revenue generator, Asia, and exit less profitable geographies. The deal does not include Citi’s institutional businesses, and the bank will continue to serve the needs of affluent to ultra-high net worth Chinese clients through its wealth hubs in Singapore and Hong Kong.

The acquisition comes as Chinese banks and foreign peers, including Standard Chartered, dominate the consumer banking sector in China. HSBC’s expansion in the country will allow it to compete more effectively and tap into the growing wealth management market.

Citigroup has been actively pursuing its strategy to exit consumer banking across multiple markets. With the sale of its China consumer wealth portfolio, Citi has now closed sales in eight markets out of the 14 it plans to exit. The bank also intends to complete the sale of its Indonesia consumer business later this year.

In addition to the China deal, Citi is progressing with the wind-down of its consumer business in Korea and its overall presence in Russia. The bank has also announced plans for an IPO of its consumer, small business, and middle market banking operations in Mexico.

HSBC’s acquisition of Citigroup’s consumer wealth portfolio underscores its commitment to expanding its presence in China and reinforces its position as a leading player in the region’s financial services industry.