HSBC Holdings Plc agreed to buy part of its partner’s stake in a China fund venture, becoming a majority shareholder and adding to its expansion in the world’s second-largest economy.
HSBC, which owns 49% of HSBC Jintrust Fund Management, reached an agreement with Shanxi Trust to acquire a further 31% of the venture, according to people familiar with the matter.
HSBC will pay about 1 billion yuan and the transaction is still awaiting regulatory approval, the people said, asking not to be identified discussing a private matter. Shanxi Trust said last year it planned to sell a 31% stake for 1 billion yuan and that HSBC had the priority to buy the holding.
The deal comes as the bank has been deepening its presence in China, despite an economic slowdown and increased risks. The UK lender this week completed the purchase of Citigroup Inc.’s retail wealth management portfolio in mainland China, comprising about US$3.6 billion in assets and deposits from wealthy customers.
HSBC Jintrust Fund Management, which oversees about 46.3 billion yuan, declined to comment, as did a spokesman for HSBC in Hong Kong.
HSBC, which counts Hong Kong as its largest market, also recently acquired the remaining 50% stake in HSBC Life China and launched other private banking initiatives across six cities in mainland China. In 2022, HSBC raised its stake in its Chinese securities venture to 90% from 51% by partially buying out its partner, Qianhai Financial Holdings Co.
Once approved, HSBC will become the largest shareholder of the firm with an 80% stake, while Shanxi Trust will be the second biggest shareholder.
HSBC already controls another mutual fund venture in China known as Hang Seng Qianhai Fund Management.
The lender is several years into a strategy of pivoting its business increasingly toward the faster-growing markets of Asia where the bank makes most of its money. Disposals of businesses in France and Canada have been balanced by acquisitions of insurance and wealth management assets in Asia. – Bloomberg