HSBC buys majority stake in China fund

HSBC (0005) has agreed to buy part of its partner's stake in a China fund venture, becoming the majority shareholder and adding to its expansion in the world's second-largest economy.

The bank, which owns 49 percent of HSBC Jintrust Fund Management, reached an agreement with Shanxi Trust to acquire a further 31 percent of the venture.

HSBC will pay about 1 billion yuan (HK$1.08 billion), with the transaction still awaiting regulatory approval. Shanxi Trust said last year it planned to sell a 31 percent stake for 1 billion yuan and that HSBC had the priority on the offering.

The deal comes as the bank has been growing its presence in China, despite an economic slowdown and increased risks. This week, the UK lender completed the purchase of Citigroup's retail wealth management portfolio in mainland China, comprising about US$3.6 billion (HK$28.08 billion) in assets and deposits from wealthy customers.

HSBC Jintrust Fund Management, which oversees about 46.3 billion yuan, declined to comment, as did a spokesman for HSBC in Hong Kong.

HSBC, which counts Hong Kong as its largest market, also recently acquired the remaining 50 percent stake in HSBC Life China and launched other private banking initiatives across six cities in mainland China.

Bloomberg