HSBC expands China footprint with Citi wealth portfolio acquisition

HSBC Bank (China) Company Limited, a subsidiary of HSBC Holdings plc (HSBC), has finalised its acquisition of investment bank and financial services corporation Citi’s retail wealth management portfolio in mainland China.

This transaction involves investment assets, deposits, and associated wealth customers from 11 major cities, now integrated into HSBC China’s Wealth and Personal Banking (WPB) operations. Additionally, over 300 former Citi employees have joined HSBC as part of this integration.

Nuno Matos, chief executive officer of Wealth and Personal Banking at HSBC, said the deal complements the company’s growing wealth businesses in the country.

“HSBC’s ambition is to be the leading international wealth manager for mass affluent and high-net-worth (‘HNW’) individuals in mainland China. 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,” he said.

HSBC’s wealth businesses in China

HSBC has one of the largest wealth service networks among foreign banks in mainland China and holds the largest Qualified Domestic Institutional Investor (QDII) quota. Its wealth management services in China span across insurance, retail wealth, private banking, asset management, and fintech.

HSBC China said it is advancing in harnessing synergies across these services to address the full range of customers’ wealth management needs.

In 2023, HSBC in mainland China experienced a 53% increase in wealth invested assets and grew its wealth client base by over 30% year-on-year. In the first quarter of 2024, HSBC saw an almost two-fold increase in net new invested assets (NNIA) compared to the previous year, contributing to a 33% year-on-year growth in NNIA across Asia, totalling USD 19 billion.

This acquisition further bolsters HSBC’s wealth management capabilities in both mainland China and the wider Asian region.

HSBC’s recent investments in mainland China

Recent developments in HSBC’s wealth capabilities in mainland China include:

• launching a flagship wealth centre in Shanghai in January 2024
• offering more than 700 funds across onshore and offshore asset classes, with “Southbound” investors having access to over 100 mutual funds under the Cross-boundary Wealth Management Connect Scheme
• providing a comprehensive range of offshore funds under the QDII scheme from numerous offshore fund house partners
• In 2023, HSBC Insurance Brokerage Company Limited became the first international wealth management institution in mainland China to hold dual licenses for insurance brokerage and fund sales, providing both insurance products from HSBC Life and mutual funds
• HSBC Global Private Banking, recognised as the Best International Private Bank in mainland China, has introduced hedge funds through trust plans, family trust advisory services, and client account services and investments via its mobile app
• HSBC’s Pinnacle mobile financial planning business employs over 1,700 personal wealth planners, with plans to expand to 1,900 by the end of 2024

The portfolio acquired does not include Citi China’s credit cards, mortgages, or other loan products.