HSBC To Buyout Its Chinese Counterpart HSBC Jintrust Management

As per a statement from two people familiar with the matter, HSBC has agreed to buy out its China fund management joint venture partner as the Asia-focused bank continues to expand in the world's second-largest economy.

HSBC, which currently owns a 49 percent stake in HSBC Jintrust Fund Management, has signed an agreement with Shanxi Trust under which the Chinese state-owned company will sell its 51 percent stake in the joint venture to the bank.

According to the sources, who declined to be identified because they were not authorised to speak to the media, the transfer is subject to a public auction of the shares as well as regulatory review and approval.

If approved, Europe's largest bank by assets, which generates the majority of its revenue and profit in Asia, will increase its presence in China's $3.8 trillion fund management market.

A HSBC spokesperson in Hong Kong declined to comment. Representatives for Shanghai-based HSBC Jintrust and Shanxi Trust did not respond immediately to a request for comment.

It was not immediately clear how much HSBC will pay Shanxi Trust to fully own HSBC Jintrust, which had $7.7 billion in funds under management at the end of March, according to the joint venture's website.

HSBC's decision to increase its stake in the fund venture is the latest in the lender's efforts to expand its presence in China.

The London-based bank converted its China insurance joint venture into a wholly-owned subsidiary in 2021 and increased its stake in its China securities joint venture to 90% last year.

HSBC has invested billions of dollars in China in recent years as part of an Asia pivot, increasing its market share in banking, insurance, and securities.

In 2022, China, including Hong Kong and the mainland, will account for approximately 44% of HSBC's profit.