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Citigroup Will Sell Its Consumer Wealth Business In China To HSBC

Citigroup Will Sell Its Consumer Wealth Business In China To HSBC
Citigroup Inc announced on Monday that it has agreed to sell its China consumer wealth portfolio to Asia-focused HSBC Holdings Plc, which includes clients, assets under management (AUM), and deposits.
The transaction will cover approximately $3.6 billion in deposits and investment AUMs and is slated to close in the first half of 2024. The transaction's financial specifics were not released.
"Today's announcement progresses the wind-down of Citi's consumer banking business in China, which was announced in December 2022," the U.S.-headquartered bank said in a statement.
Citi revealed its intention to depart China consumer banking in April 2021 as part of a global strategy overhaul. With deposit, fund, and structured product offerings, the consumer banking business primarily served wealthy clients.
Reuters initially reported late last month that HSBC was planning to buy Citi's China consumer wealth unit, a significant boost to the London-based bank's presence in the world's second-largest economy.
Citi's consumer banking operation in China is overshadowed by Chinese banks and foreign competitors such as Standard Chartered, who all have more retail branches handling wealth management.
The acquisition of Citi's wealth portfolio will assist HSBC in expanding its footprint in China, one of its main markets, as Europe's largest lender commits to abandon less profitable countries in order to focus on Asia, its key income source.
HSBC may now provide wealth management solutions, mobile fund and insurance solutions in mainland China, based on regulatory permissions received in previous years, the bank said in a statement on Monday.
In January, HSBC announced a strategic investment in Shanghai MediTrust Health Technology Co. Ltd.
For the first six months of 2023, HSBC achieved $27 billion in net new invested asset inflows in Asia, a 21% increase year on year, with more than 35% of the value coming from outside Hong Kong, the statement said. 
Citi's institutional operations will continue to serve the needs of affluent to ultra-high net worth Chinese clients through its regional wealth hubs in Singapore and Hong Kong, according to the bank.
Citi has already concluded sales in eight markets after declaring its intention to depart consumer banking across 14 markets in Asia, Europe, the Middle East, and Mexico as part of its strategic overhaul.
Aside from the China consumer banking transaction, Citi intends to finalise the sale of its Indonesia consumer business later this year, according to a bank statement.
Citi's consumer business in Korea and its overall presence in Russia are being phased out, as previously reported.
Citi has also announced plans to list its consumer, small business, and middle market banking operations in Mexico on the stock exchange.

Christopher J. Mitchell

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