SINGAPORE/HONG KONG: HSBC Holdings agreed to acquire French insurer Axa's Singapore assets for US$575 million, part of its strategy of scaling up its wealth-management business in Asia and boosting fee income.
HSBC said in a statement that the combined unit comprising HSBC Life Singapore and Axa Singapore would be the seventh-largest life insurer and the fourth-largest retail health insurer in Singapore, with over 600,000 policies in-force covering life, health and property and casualty insurance.
HSBC is 10th in life insurance in Singapore, and does not have a health insurance business.
"This transaction gives the scale and the capability to continue to invest and grow from here," Bryce Johns, global CEO of HSBC life and insurance partnerships, told Reuters in an interview on Monday.
The deal is HSBC's largest acquisition since the $726 merger of its Oman branch with Oman International Bank in 2012, according to Dealogic.
Singapore, one of Asia's biggest offshore wealth hubs, is also home to thousands of global companies using the city-state as a base for regional operations.
Last year, Singapore Life, an upstart insurer backed by investors including buyout group TPG and insurer Sumitomo Life, acquired the Singapore business of British insurer Aviva, as it expands in Southeast Asia.
HSBC Group Chief Executive Noel Quinn said last month that HSBC was looking at three or four "bolt on" acquisitions in Asia outside China in areas including insurance and asset management, while it would focus on organic growth in Hong Kong and mainland China.
The bank said in February it would invest $3.5 billion in its wealth and personal banking business in Asia, while shifting assets away from some less-profitable business lines in Europe and North America.
It sold out of retail banking in the U.S. and France this year.
It is also trying to generate more revenue from fees it earns from selling products to customers, as banks struggles with lending in a low interest rate environment.
Axa, whose Singapore unit had net assets of $474 million, annualized new premiums of $85 million and gross written premiums of $739 million, said that the deal was subject to regulatory approvals and would probably close by the fourth quarter.
HSBC said Axa Singapore would provide it access to a sizeable tied-agency sales force, many leading independent financial advisory firms, and a large pool of insurance policyholders and corporate relationships.
The sale is part of Axa's moves to streamline its business, which has led it to sell assets in some countries. - Reuters
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