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HSBC is set to buy Citigroup’s China consumer wealth management business, which manages more than $3bn in assets, two people with knowledge of the matter said, as the London-based bank seeks to boost its business there.

HSBC is set to buy Citigroup’s China consumer wealth management business, which manages more than $3bn in assets, two people with knowledge of the matter said, as the Londonbased bank seeks to boost its business there.

The transaction, the financial details of which were not immediately known, will also see Asia-focused HSBC taking over “a few hundred” of Citi’s Chinabased staff. The deal could be announced as soon as October, the two people said, who asked not to be identified because they are not authorised to speak to the media.

HSBC and Citi declined to comment.

The acquisition adds to a list of moves by HSBC to expand in China, one of its main markets, as Europe’s largest lender vows to exit less profitable regions to focus on Asia, its biggest source of revenue.

Looming uncertainties about doing business in China have dampened the appetite of Western companies, with fewer banks boosting their presence in the face of weaker growth and new national security restrictions on data transfers.

However, HSBC chair Mark Tucker told Beijing officials during a visit in July that an “icebreaking” spirit adopted by British businesses historically would help the UK and China overcome challenges and geopolitical tensions, a bank statement said.

WEALTHY CLIENTS

The bank, which already runs wealth management and private banking services in the local market, earlier in September scored a first-of-its-kind fund distribution qualification granted to a foreign firm, giving it new opportunities in China’s 28.8trillion yuan ($3.94-trillion) fund market.

HSBC aims to tap its insurance brokerage network to start fund sales to wealthy Chinese as soon as next month, the second person said.

Citi’s China wealth management operations, part of the retail banking business it has been looking to exit since 2021, mainly serve rich clients in the world’s second-largest economy with deposit, fund and structured product offerings.

Its $3bn in consumer assets under management is dwarfed by its Chinese and foreign peers such as Standard Chartered, which have more retail branches handling wealth management.

Its private banking services, catering to wealthy Chinese clients from the bank’s locations outside China, remains intact, the first person said. Citi has also applied to set up a China securities brokerage unit.

Citi said in December it was looking to sell some of its portfolios as it wound down its China retail banking business, part of a strategy to withdraw from consumer franchises in 14 markets in Asia, Europe, the Middle East, Africa and Mexico.

In Asia, Citi is closing its South Korea operation and plans to complete transferring its Indonesian business to UOB Group. In August, it completed the sale and migration of its Taiwan consumer businesses.