M and A

Citigroup Completes Mainland China Retail Wealth Sale To HSBC

Tom Burroughes Group Editor June 11, 2024

Citigroup Completes Mainland China Retail Wealth Sale To HSBC

Time will tell whether Citigroup's sale of 14 businesses around the world, from Mexico to Malaysia, will enable CEO Jane Fraser to achieve stronger bottom-line results in the medium term. For HSBC, it said the deal adds to its momentum in this segment of Asia.

Citigroup has completed the sale of its retail wealth management business in mainland China, continuing a spin-off of businesses as the US bank restructures under CEO Jane Fraser’s plans.

Today, HSBC Bank (China), a wholly-owned subsidiary of UK/Hong Kong-listed HSBC, said it has wrapped up the acquisition. It will result in more than 300 Citigroup employees joining HSBC.

The Wall Street-listed banking group has been selling off 14 retail banking businesses around the world, focusing on the higher reaches of wealth management and other business segments instead. Time will tell whether this conscious decision to shrink a retail footprint overseas will benefit the bottom line. In the first quarter of 2024, Citigroup said its net income dropped year-on-year, although revenues on the private banking and wealth side improved marginally. (See here for examples of Citi's bank sales.)  

Citigroup has closed sales in nine of those markets including Australia, Bahrain, India, Indonesia, Malaysia, the Philippines, Taiwan, Thailand and Vietnam. The bank said it is also pursuing the establishment of a wholly-owned securities and futures company in onshore China.

Citigroup's institutional businesses in China are excluded from the sale, it said in a statement. "Citi remains focused on serving institutional clients in China locally, regionally and globally," it said. 

The portfolio of investment assets and deposits, and associated wealth customers, cover 11 major cities in mainland China, HSBC said in its statement. This has been integrated into HSBC China’s Wealth and Personal Banking operations. (That operation includes private banking.)

“HSBC’s ambition is to be the leading international wealth manager for mass affluent and high net worth individuals in mainland China,” Nuno Matos (pictured), chief executive, wealth and personal banking, said. “This portfolio complements our growing set of wealth businesses in the country, demonstrating our commitment to the Chinese market and to helping our clients diversify their assets and enhance their long-term returns.”

HSBC said it has one of the largest wealth service networks of foreign banks in mainland China and is the largest Qualified Domestic Institutional Investor quota-holding bank. 

The bank sees such acquisitions as part of its growing momentum as an Asian bank (it earns the bulk of its revenues outside the UK, and reports results in dollars). 

In 2023, in mainland China HSBC grew wealth invested assets by 53 per cent and its wealth client base by more than 30 per cent on a year earlier. In the first three months of this year, HSBC’s business in mainland China recorded an almost twofold increase in net new invested assets on a year earlier, to $19 billion. 

Register for FamilyWealthReport today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes