London: HSBC Holdings agreed to buy AXA Singapore for $575 million in a push to build a global wealth hub in Singapore and fuel its expansion across Southeast Asia amid increasing tension in China.
The acquisition will give HSBC the eighth largest life insurer in Singapore, as well as a leading group health insurance firm, with assets of $474 million, according to a statement.
“This is an important acquisition that demonstrates our ambition to grow our wealth business across Asia,” CEO Noel Quinn said in the statement. “Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach.”
Pivot to Asia
The London-based bank is in the midst of a pivot to Asia, pouring billions into the region as it exits unprofitable business elsewhere. Expanding in Singapore comes after years of tensions for the bank in Hong Kong, its biggest market, and mainland China.
While there has been no major evidence of money flowing out of Hong Kong, many high-net worth individuals in the city have set up contingency plans should they need to move cash out of the city as China tightens its grip.
HSBC has outlined ambitious plans for wealth management, particularly in China, to become the leader in Asia. It plans to hire more than 5,000 new wealth planners to grow its business over the next three to five years, boosting income from stable fee income as low interest rates continue to weigh on the lender.