HSBC Likely To Buy Citigroup's China Consumer Wealth Unit

(RTTNews) - Banking major HSBC Holdings plc (HSBA.L, HSBC) is preparing to buy Citigroup's (C) China consumer wealth management business, Reuters reported citing sources with knowledge of the matter.

With the planned deal, Asia-focussed HSBC will also takes over a few hundreds of Citi's China-based staff. The deal is likely to be announced as soon as next month.

Citi's China consumer wealth management unit, which is part of the retail banking business, manages more than $3 billion in assets.

HSBC's expansion plan in China is said to be in line with its efforts to exit less profitable geographies to focus on its key revenue generator, Asia.

In mid May, HSBC had provided a profitable outlook for its business in Asia saying the region is positioned to serve the rest of the world.

Group Chief Executive Noel Quinn then said, "In addition to our core strength in Hong Kong, we now have growth engines in mainland China, India, Singapore and beyond."

Meanwhile, Citi reportedly has been looking to exit its retail banking business since 2021.

In December last year, Citi had said that it was looking to sell some of its portfolios as part of its plan to exit China retail banking business. The company reportedly is moving to withdraw from consumer franchises in 14 markets in Asia, Europe, the Middle East, Africa and Mexico.

Earlier this month, Citigroup CEO Jane Fraser unveild a restructuring plan to simplify the bank's operations. Citi then said the new model would eliminate the Personal Banking & Wealth Management and Institutional Clients Group management layers, as well as the existing regional layers in Asia Pacific, Europe, Middle East and Africa, and Latin America.

In Asia, Citi is also in the process of closing its South Korea operation. The bank plans to complete sale of Indonesian business to UOB Group.

In August, it completed the sale and migration of its Taiwan consumer businesses.

Meanwhile, Citi's private banking services remains unaffected with the deal, and the bank is also in the process to set up a China securities brokerage unit.