HSBC sells Singapore insurance business to Allianz for US$2.1 billion
HSBC has reached an agreement to sell its Singapore insurance business to Allianz for US$2.1 billion. Currently, under the leadership of CEO George Elkhedri, HSBC is promoting the restructuring of its global business. Elkhedri has been at the helm of Europe's largest bank for two years. During his tenure, he shut down HSBC's investment banking business in the United States and Europe and withdrew from some overseas markets. HSBC officially announced the transaction on Friday and reiterated its determination to deeply explore the Singapore market. Singapore is the region that contributes the fifth highest pre-tax profit to the group and is also an important wealth management center for HSBC. HSBC said: "This transaction is part of the HSBC Group's continued streamlining of its business layout. The Group will concentrate its resources to consolidate its industry leading position and expand market share in areas where it has significant competitive advantages, sufficient growth potential and can better serve customers." The transaction still needs approval from regulatory agencies in various countries and is expected to be completed in the first half of 2027. The sale completely reversed HSBC’s previous layout plan in the insurance industry. Just in 2022, HSBC also spent US$529 million to acquire AXA's Singapore insurance business. At that time, the bank said that the acquisition would help it accelerate its goal of building "Asia's top insurance and wealth management service provider." After Elkhedri took office, HSBC began to streamline its complex and fragmented global business landscape. HSBC disclosed that this asset disposal will achieve pre-tax net income of US$1.8 billion and promote the group's core tier one capital adequacy ratio to increase by 15 basis points. This indicator is the core basis for measuring the bank's financial stability. As a supporting transaction arrangement, HSBC signed a 15-year distribution agreement with German insurance giant Allianz: HSBC can rely on its own customer base channels to sell Allianz insurance products. Allianz will pay US$200 million in cash in advance as consideration for the agency sales cooperation with HSBC. Earlier this month, it was reported that HSBC had begun promoting Hang Seng Bank's high-risk credit assets to institutional investors, sending a clear signal that HSBC planned to overhaul the Hong Kong bank it completed a wholly-owned acquisition of earlier this year. In recent months, HSBC has allowed bond investors to access Hang Seng Bank’s entire loan ledger, two people familiar with the matter said. As the London stock market closed on Thursday, HSBC's share price fell slightly by nearly 1%; however, the stock's cumulative increase during the year reached 28%, corresponding to a total market value of 262 billion pounds.