US bank Citigroup to sell its China retail business to HSBC

NEW YORK, Oct 09 (Agencies): US bank Citigroup is to sell its consumer banking business in China to Asia-focused banking giant HSBC, it announced on Monday.
The deal, which will be finalised in the first half of 2024, will include the transfer of around $3.6 billion in assets under management and bank deposits to HSBC, Citi said in a statement.
Citi's institutional client business in China will not be affected.
"We are taking important steps forward in exiting our consumer banking business in China and continue to make progress in our divestitures as part of our strategy to simplify Citi," Titi Cole, Citi's Head of Legacy Franchises, said in the statement.
"This is an excellent outcome for our local consumer wealth colleagues and clients in China," added Cole.
Citigroup in 2021 unveiled plans to significantly downsize its global consumer banking footprint as it shifted its focus to wealth management and away from retail banking in places where it has a small presence.
It said it would exit consumer banking across 14 markets including in Asia, Europe and the Middle East.
It has since then shuttered its retail banking activities in eight markets, including Australia, India, Malaysia, Thailand and Vietnam, the statement said.
Citi first launched in China in 1902 and was one of the first global banks to incorporate locally in 2007.
Reuters first reported late last month that HSBC was set to acquire Citi's China consumer wealth business, in a major boost to the London-based bank's business in the world's second-largest economy.
Citi's consumer banking business size in China is dwarfed by Chinese banks and foreign peers including Standard Chartered, all which have more retail branches handling wealth management.
The acquisition of Citi's wealth portfolio will help HSBC expand its presence in China, one of its key markets as Europe's largest lender vows to exit less profitable geographies to focus on its key revenue generator, Asia.
Based on the regulatory approvals it obtained in recent years, HSBC can now provide wealth management solutions and mobile fund and insurance solutions in mainland China, the bank said in a statement on Monday.
HSBC made a strategic investment in Shanghai MediTrust Health Technology Co. Ltd., which was announced in January.
HSBC recorded $27 billion in net new invested asset inflows in Asia for the first six months of 2023, up 21 per cent year on year, and more than 35 per cent of the value originates from outside Hong Kong, the statement said.
The deal with HSBC does not include Citi's institutional businesses, the bank said, adding it would continue to serve the needs of affluent to ultra-high net worth Chinese clients via its regional wealth hubs in Singapore and Hong Kong.
Since announcing its intention to exit consumer banking across 14 markets in Asia, Europe, the Middle East and Mexico as part of its strategic revamp, Citi has now closed sales in eight markets, it said.
Apart from the China consumer banking deal, Citi plans to complete the sale of its Indonesia consumer business later this year, the bank statement said.
Previously announced wind-downs of Citi's consumer business in Korea and its overall presence in Russia are in progress. Citi has also announced it will pursue an IPO of its consumer, small business and middle market banking operations in Mexico.