Dive Brief:
- Citi is in talks to sell its China retail-wealth unit to HSBC, The Wall Street Journal, Bloomberg and Reuters reported on Thursday, citing sources familiar with the matter.
- The transaction, which could be announced as early as next month, would result in HSBC acquiring the business’ $4 billion of assets and deposits and about 400 staff, Bloomberg reported.
- The deal would mark the latest iteration of Citi’s steps to withdraw from consumer franchises across the globe. HSBC, meanwhile, has pledged to build out its Asian wealth business over the next five years.
Dive Insight:
As part of a global retreat announced in 2021, Citi aims to exit 14 markets in Asia, Europe, the Middle East, Africa and Mexico. The bank announced last year that it planned to wind down its consumer-banking operations in China.
The bank’s retail-wealth unit in China serves clients with assets between $100,000 and $1 million, according to The Journal. The unit provides customers with deposit, fund and structured product offerings, Reuters reported.
Citi declined Banking Dive’s request for comment on the reported deal. HSBC did not respond to a request for comment.
Meanwhile, an attempt by HSBC to acquire the China retail-wealth operation fits with the London-based bank’s efforts to renew its focus on Asia, a key revenue generator for the firm.
The bank, two years ago, pledged to bolster its Asian wealth business over the next five years to the tune of more than $3.5 billion, The Journal reported.
HSBC CEO Noel Quinn told the Financial Times in February, that the firm was looking for “potential bolt-ons” to enhance its wealth business in the continent.
“Nothing imminent, but we keep looking and if we see the right opportunity, we’ve got the capacity to do it,” he said.
HSBC’s efforts to bolster its presence in Asia, however, have garnered pushback from Ping An, the Chinese insurer that owns an 8% stake in the bank.
HSBC’s Asia operations are responsible for about 60% of the bank’s profits. Ping An, the bank’s largest investor, has urged the bank repeatedly to split its Western and Asian operations.
