HSBC Holdings has agreed to acquire 100% of the dispensed capital of AXA Singapore for $575 million as a part of its tactic to spread its roots in the wealth management trail in Asia to enhance fee income. This acquisition will make HSBC the foremost wealth manager in Asia by expanding its wealth franchise and wealth services in Singapore.
Singapore is a strategically essential scale market for HSBC and a major pivot for its ASEAN wealth business. AXA Singapore is currently one of the largest life insurers in Singapore by annualized new bonuses and one of the largest property and casualty (P&C) insurers, and the foremost group health player. Owing to the business’ harmonizing product range across the range of insurance solutions and distribution channels, this acquisition will prove most beneficial for HSBC’s prevailing HSBC Insurance (Singapore) Pte Ltd.’s business.
The merged business will not only up-scale HSBC’s existence financially in the regional insurance market, but it will also provide an exceptional opportunity for growth. The merged business would offer over 600,000 policies covering life, health, and property and casualty insurance.
Capgemini’s World Wealth Report 2021 discovered an 8.4% extension of wealth in the Asia-Pacific in 2020. With HSBC’s ambition to become the leading wealth manager in the region, the acquisition of AXA Singapore is expected to instantly expand the overall earnings of the group.
HSBC is focusing on dealing with a low-interest-rate environment that gives poor returns from lending. The Asia-centric bank is looking to increase customer fee income in domains like asset management and insurance. Singapore is one of Asia’s biggest wealth hubs. It is also a base for several global companies. This deal will give the bank the freedom to invest and grow in Asia as it does not have a health insurance business in Singapore yet.
