HSBC Acquires Citigroup’s China Consumer Wealth Portfolio in Strategic Asian Expansion

This move aligns with Citi's ongoing strategy to wind down its consumer banking operations in China, a plan that was publicized in December 2022.

Citigroup Inc has agreed to sell its China consumer wealth portfolio, which includes clients, assets under management (AUM), and deposits, to HSBC Holdings Plc.

This transaction encompasses deposits and investment AUMs worth around $3.6 billion and is anticipated to conclude in the first half of 2024. The specifics of the financial arrangement remain undisclosed.

This move aligns with Citi’s ongoing strategy to wind down its consumer banking operations in China, a plan that was publicized in December 2022.

The initial announcement regarding Citi’s intention to exit China’s consumer banking sector was made in April 2021.

This venture primarily targeted affluent customers, offering them services such as deposits, funds, and structured products.

HSBC’s acquisition of this business segment from Citi reinforces its position in China’s booming economy. Compared to its competitors, including large Chinese banks and international entities like Standard Chartered, Citi’s presence in China’s consumer banking segment is relatively small.

HSBC’s purchase is instrumental in bolstering its stance in China, a pivotal market for the bank. HSBC has been strategically channeling its resources and focus towards more profitable regions, especially Asia.

HSBC’s recent regulatory approvals empower it to present wealth management, mobile fund, and insurance solutions in mainland China.

The bank has further deepened its roots in the region with an investment in Shanghai MediTrust Health Technology Co. Ltd.

Additionally, for the first half of 2023, HSBC witnessed a 21% annual rise in net new invested asset inflows in Asia, with over a third originating outside Hong Kong.

It’s worth noting that the agreement between Citi and HSBC excludes Citi’s institutional operations.

Citi confirmed its commitment to catering to affluent and ultra-rich Chinese clientele through its regional wealth centers located in Singapore and Hong Kong.

In line with its restructuring agenda, Citi has been methodically retracting from consumer banking in several regions, including parts of Asia, Europe, the Middle East, and Mexico.

So far, Citi has finalized its exit from eight of these markets.

Apart from China, Citi is also on track to wrap up the sale of its consumer business in Indonesia within the year. Other transitions, like the wind-down in Korea and the proposed IPO in Mexico, are underway.