HSBC Bank China is poised to acquire Citibank's onshore consumer wealth portfolio in mainland China, a deal that involves $3.6 billion in deposits and investments across 11 cities. The agreement, announced on Monday, excludes credit cards and loans, and is expected to be finalized by the first half of 2024.
This acquisition aligns with Citibank's global strategy refresh initiated in April 2021, which involves exiting its consumer banking operations in 14 global markets. The bank has already completed its exit from eight markets and is currently winding down operations in Korea and Russia. Later this year, Citi also plans to sell its consumer business in Indonesia. Even as it exits these markets, Citi will maintain its institutional business in China, serving affluent clients from its Singapore and Hong Kong wealth hubs.
Christine Lam of Citibank (China) Co. communicated that this decision was informed by the bank's long history in China. As part of the deal, HSBC intends to retain employees supporting Citi's local consumer wealth business, integrating the acquired business into its existing China operations.
The move reflects HSBC's confidence in China's economic development and is another step in the bank's recent expansions. Led by APAC co-CEO David Liao, HSBC became a wholly-owned insurer with HSBC Life in 2020 and launched global private banking services across six Chinese cities in 2022. The bank also has formed a mobile wealth planner team. The bank's strong earnings have allowed it to continue dividend payments, with the dividend having been raised for three consecutive years.
In contrast, Citibank has been grappling with declining earnings per share and a downward revision of earnings by six analysts for the upcoming period, as per InvestingPro Tips. Despite these challenges, the bank has maintained dividend payments for 13 consecutive years and is expected to remain profitable this year.
In addition to its ongoing market exits, Citi intends to launch an initial public offering for its consumer, small business, and middle market banking operations in Mexico. The exact timeline for this IPO has not been disclosed.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.