HSBC Life China to buy out its joint venture partner

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HSBC Life China to buy out its joint venture partner

HSBC Insurance has announced it is buying the remaining 50% stake in its HSBC Life China joint-venture with National Trust.

The move by HSBC Holdings will allow HSBC Life China to fully own the company at a time when HSBC is looking to expand its market share across China.

The buyout comes 11 years after HSBC Life China was established as a joint venture, and has been made possible by new regulations which came into force in January. 

Full ownership of HSBC Life China, combined with the HSBC Group’s international strengths and robust digital and wealth management capabilities, will enable us to significantly extend our reach and amplify the scope of our life insurance offerings."

China's new rules abolished caps on foreign ownership of securities, futures and life insurance firms. 

The deal will enable HSBC Life China to aggressively expand its reach and fits with the wider strategic pivot to Asia by HSBC. The bank is headquartered in the UK yet makes most of its revenue and profits in Asia. China is the world's third-largest insurance market.

Bryce Johns, global chief executive of HSBC Life, said: "Full ownership of HSBC Life China, combined with the HSBC Group's international strengths and robust digital and wealth management capabilities, will enable us to significantly extend our reach and amplify the scope of our life insurance offerings to meet the burgeoning protection, health and wealth needs of our customers in the mainland."

With its head office in Shanghai, HSBC Life China has offices in nine cities across the Mainland. The subsidiary posted $145m in registered capital as of December 2019.

The buyout is subject to regulatory approval from the China Banking and Insurance Regulatory Commission.

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Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.