Bloomberg / London
HSBC Holdings Plc won regulatory approval to take full control of its life insurance venture in China after more than one and half years’ waiting, marking an initial success in mending frayed relations with Beijing.
HSBC will buy the remaining 50% stake in HSBC Life China from The National Trust Ltd after the approval by the China Banking and Insurance Regulatory Commission, according to a statement from the regulator on Thursday.
Europe’s largest lender is steering billions of dollars in capital toward Asia to lift its profitability while shrinking or exiting operations in other parts of the world. Key to its growth strategy in Greater China is capitalising on the rising affluence in the world’s second-largest economy.
However, the lender has come under attack in China over its co-operation in a US probe into Huawei Technologies Co since 2019. Its public support of a security law imposed on Hong Kong, its biggest market, has also drawn criticism from activists in the city and western politicians.
The latest approval comes three months after Huawei’s chief financial officer Meng Wanzhou struck a deal that released her from a US extradition request that had kept her under house arrest in Canada for two years. Still, the Biden administration has shown no signs of easing the sanctions imposed on Huawei.
Meanwhile, China opened its vast $54tn financial industry to allow foreign companies to take full ownership in businesses spanning insurance, investment banking and funds management. HSBC’s Chinese insurance venture was formed in 2009 and is present in ten key mainland cities, including Shanghai, Beijing, Guangzhou, and Shenzhen.
The push fits well into the vision of HSBC Chairman Mark Tucker, who has formerly run AIA Group Ltd and Prudential Plc. HSBC last month appointed Greg Hingston global CEO of HSBC Life and Insurance Partnerships starting January 1, 2022.
“Growing our insurance business is key to delivering on our strategic priority of being a leading wealth manager in Asia,” David Liao, HSBC’s co-chief executive officer in Asia Pacific, said in a statement. “Full ownership of HSBC Life China brings us closer to this goal, and shows our commitment to expanding our broader wealth offering in mainland China.”
HSBC has also been investing in insurance and wealth business in China through Pinnacle - a personal financial planning business launched last year.
Nearly 700 digitally-enabled wealth planners are already onboard in Beijing, Guangzhou, Shanghai, Hangzhou and Shenzhen, and the bank aims to recruit up to 3,000 wealth planners in total by 2025.
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