HSBC acquires Citi's $3.6B China retail assets

Citigroup has decided to part ways with its consumer wealth portfolio in China. The baton is now being passed to HSBC.

• The Handover: Set to be finalized by the first half of 2024, the handover includes all facets of the consumer wealth portfolio - clients, assets under management (AUM), and deposits.

• Numbers Game: The deal is worth $3.6B of deposits and investment AUMs. Citigroup has chosen to keep the other financial details under wraps, leading to much speculation.

• Strategic Moves: This transaction forms part of Citigroup's overarching strategy to wind down its consumer banking business in China, a decision first made public in April 2021. While Citigroup's consumer banking business in China was overshadowed by local and foreign entities like Standard Chartered, the decision still marks a significant shift.

• Revamp: The global strategy shift has led Citigroup to close sales in eight markets so far, and the bank intends to exit consumer banking across 14 markets in Asia, Europe, the Middle East, and Mexico.

• Other Sales: Citigroup is also planning to sell its Indonesia consumer business later this year, while the shutdown of its consumer business in Korea and overall presence in Russia is in progress.

• Possible IPO: Citigroup also plans to IPO its consumer, small business, and middle market banking operations in Mexico.

This acquisition paves the way for HSBC to broaden its influence in China. HSBC can now provide wealth management, mobile funds, and insurance solutions in mainland China, following recent regulatory approvals.

As part of their growth strategy, HSBC is also investing in Shanghai MediTrust Health Technology.