Citigroup confirms sale of China-wealth unit to HSBC

By Steve Gelsi

HSBC will offer jobs to the reported 400 Citi employees, while Citi retains its commercial banking unit.

Citigroup Inc. on Monday confirmed reports of the sale of its consumer-wealth portfolio in China to HSBC Plc after it announced plans to exit the business in December 2022.

Citi (C) will keep its institutional banking business in China, with about 300 established companies and additional startups. It will also serve ultra-high-net-worth clients in China through its regional wealth hubs in Hong Kong and Singapore through its Citi Private Bank and International Private Bank units.

Citi fell 1% in premarket trades, as the deadly weekend attack in Israel's West Bank by Hamas roiled equity markets around the globe on Monday.

Citi did not disclose the price of the China consumer-wealth deal, but said it encompasses $3.6 billion in total deposits and investment assets under management. The transaction is expected to close in the first half of 2024.

HSBC will extend offers to employees at Citi working on the consumer-wealth business, Citi said. The unit employs 400 people, according to reports.

Titi Cole, Citi's head of legacy franchises, and Christine Lam, Citi China Country Officer and president of Citibank (China) Co. Ltd., worked on the deal for Citi.

Citi traces its roots in China to 1902.

After announcing plans to scale back its overseas retail banking business in early 2021, Citigroup has been shedding its overseas consumer businesses including an upcoming initial public offering of Banamex in Mexico.

For its part, HSBC Holdings Plc (HSBC) has aired plans to invest $3.5 billion by 2026 for its Asian wealth business.

HSBC has also recruited about 1,400 wealth managers in China through its Pinnacle unit.

Last month, Reuters initially reported Citi's China consumer-bank deal, which was also confirmed by unnamed sources who spoke to the Wall Street Journal.

Citi has now exited eight of 14 markets including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand and Vietnam.

It expects to exit Indonesia later in 2023 and is working on winding down operations in Korea and Russia.

For its part, Citi said last month it will simplify its structure by eliminating its personal-banking and wealth-management layer, as well as its institutional-clients group.

It will also do away with regional layers in the Asia-Pacific region, Europe, the Middle East and Africa, and Latin America as it exits these businesses.

The bank named leaders of its five business main business units: Shahmir Khaliq, services; Andrew Morton, markets; Peter Babej, head of banking on an interim basis; Andy Sieg, wealth; and Gonzalo Luchetti, U.S. personal banking.

Also read: Citigroup readying $5B bond offering as first such deal in four years, source says

-Steve Gelsi

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10-09-23 0650ET

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