HSBC said Monday that its subsidiary has agreed to buy French-multinational insurance firm Axa’s business in Singapore for $575m. The acquisition is a part of HSBC’s plans to expand its wealth management business in Asia.
HSBC, Europe’s biggest bank by assets, will fund the acquisition through existing resources and the lender said in a statement that it will have a minimal impact of 5 basis points on HSBC’s common equity tier 1 (CET1) ratio. The bank expects the acquisition to be “immediately accretive” to its group-level earnings.
Axa’s Singapore unit is the eight-largest life insurer in Singapore by annualised premiums, fifth-largest property and casualty insurer and a leading health insurer, according to the statement by HSBC.
“Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach. We are acquiring a good business that fits well with our existing operations and which strengthens our status as one of Asia’s leading wealth and insurance providers,” said Noel Quinn, group chief executive at HSBC.
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