HSBC recently agreed to buy the Singapore unit of French insurance giant AXA for $575 million as the British banking giant works on expanding its presence in Southeast Asia, according to media reports. It is also worth noting that HSBC makes 90 percent of its profit in Asia and reportedly has plans to double down on its efforts to capture more market share in the region.
This acquisition will give HSBC net assets of $474 million as of December 31, 2020. AXA Singapore is also the fifth-largest property and casualty insurer in the city-state.
Noel Quinn, group chief executive of HSBC released a statement saying, “This is an important acquisition that demonstrates our ambition to grow our wealth business across Asia. Wealth is one of our highest growth and highest return opportunities and plays to our strengths as an Asia-centered bank with global reach.”
The acquisition, which is subject to regulatory approval, once completed, will combine AXA Singapore with HSBC Insurance (Asia-Pacific) Holdings. This is expected to help HSBC scale up its presence in the regional market and provide an excellent platform for future growth.
At present, Singapore is considered to be a strategically important scale market for HSBC, and a major hub for its ASEAN wealth business. AXA Singapore expects the transaction to be completed by the fourth quarter of this year and the sale is in line with the company’s group strategy as they are focusing on the core market where they have the size, presence in the right business segments and a strong potential to grow.