HSBC has agreed to sell its health and life insurance business in Singapore to German insurer Allianz for $2.1bn (£1.6bn), marking a fresh step in the FTSE 100 lender’s strategy to double down on wealth management in the city-state.
The transaction, announced on Wednesday, covers HSBC’s insurance operations in Singapore but not its wider Asian insurance portfolio. The sale is expected to close in the first half of the year, the bank said.
“HSBC sells Singapore insurance business to Allianz for £1.6bn as it refocuses on wealth management.”
“This deal allows HSBC to sharpen its focus on growing our wealth management franchise in Singapore,” a spokesperson said, adding that the bank will continue to offer insurance products through a new long-term distribution agreement with Allianz.
The move comes as HSBC, under CEO Georges Elhedery, accelerates a push into Asia’s affluent client base, particularly in Singapore, where it competes with DBS and OCBC for private banking market share. The sale proceeds will bolster its capital position as it seeks to expand its asset and wealth management arm.
Allianz, which already operates a general insurance business in Singapore, described the acquisition as a “transformational step” that will make it one of the largest health insurers in the market. The purchase is subject to regulatory approval.
The deal is the latest in a series of portfolio reshuffles by HSBC. Last year, the bank sold its Canadian operations and its French retail network, while buying the UK arm of Silicon Valley Bank. Allianz, meanwhile, has been aggressively expanding in Asia, where it sees rising demand for health coverage among the region’s growing middle class.
HSBC shares rose 0.8% in London trading after the announcement. The transaction is expected to add to Allianz’s earnings from the first year post-completion.
For now, the sale signals HSBC’s conviction that its future in Singapore lies not in underwriting insurance, but in managing the fortunes of the wealthy.