(Bloomberg) -- HSBC Holdings Plc agreed to buy Citigroup Inc's retail wealth management portfolio in mainland China, adding to its expansion in the world's second-largest economy.
The portfolio comprises about $3.6 billion in assets and deposits from wealth customers across 11 major cities, HSBC said in a statement. Terms of the transaction weren't disclosed and the deal is expected to close in the first half of 2024, Citi said.
HSBC is pushing to become a leader in one of the world's fastest growing wealth markets as part of its pivot to Asia strategy. Even so, the deal comes amid growing concern over the direction of the Chinese economy amid a protracted slump in the country's real estate market, which had been a major source of wealth growth, and a crack down on private enterprise.
“Mainland China is central to our ambition to be the leading wealth manager in Asia,” said Nuno Matos, chief executive officer wealth and personal banking at HSBC.
The London-headquartered lender has pursued a combination of “organic and inorganic initiatives” to deepen coverage of mainland China wealth customers, with a focus on affluent and emerging affluent sectors. HSBC, which counts Hong Kong as its largest market, also recently acquired the remaining 50% stake in HSBC Life China and launched other private banking initiatives across six cities in mainland China.
The sale is part of a wind-down of Citi's consumer banking business in China, which was announced in December 2022. The portfolio excludes credit cards, mortgages and other loans of Citi China.
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