HSBC Buys its Chinese Unit HSBC Jintrust Management

HSBC has acquired its Chinese unit, HSBC Jintrust Management. The UK-headquartered financial firm reached an agreement for the buyout of its fund partner in China.

According to Reuters, the news was shared by people who are familiar with the deal. They said that HSBC agreed to buy its joint venture partner as the company is seeking expansion in China. Currently, it holds a 49% stake in HSBC Jintrust Fund Management, and it has inked a deal with Shanxi Trust to buy the 51% share it owns in the JV.

Then again, the sale of shares is still subject to a public auction and regulatory review for approval. The two sources were not named because they were not authorized to speak to the media about the deal.

If the regulatory board gives its “go ahead” signal for the acquisition of HSBC Jintrust Management, HSBC will be able to easily scale up its presence in Asia further. This region is also the top revenue-maker for the company.

It is not clear how much HSBC is buying HSBC Jintrust from Shanxi Trust, but it is probably a multi-billion dollar deal since it was indicated on the joint venture’s webpage that it has $7.7 billion in funds as of late March.

At any rate, it was reported that HSBC’s decision to sign the deal for the acquisition of its Chinese fund business counterpart comes as it deals with the months-long campaign from shareholder Ping An Bank to withdraw its business in Asia.

Meanwhile, Asia Business Outlook reported that the spokesperson of HSBC in Hong Kong spokesperson in Hong Kong declined when asked to give comment on the news. Both HSBC Jintrust and Shanxi Trust did not respond to requests for comment as well thus, there is no direct confirmation of the deal yet as of this time.

Photo by: Erik Mclean/Unsplash