Exclusive-HSBC reaches deal to buy out China fund partner -sources

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HONG KONG (Reuters) -HSBC has agreed to buy out its China fund management joint venture partner, two people familiar with the matter said, as the Asia-focused bank pushes ahead with expansion in the world’s second-largest economy.

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

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

If approved, Europe’s biggest bank by assets, which makes the bulk of its revenue and profit in Asia, will expand its presence in the $3.8 trillion fund management market in China.

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

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

HSBC’s move to boost its stake in the fund venture is the lender’s latest to expand its presence in China.

The London-headquartered bank converted its China insurance joint venture to a wholly-owned subsidiary in 2021, and boosted ownership of its China securities joint venture to 90% last year.

HSBC has deployed billions of dollars in China in the last few years as part of an Asia pivot, boosting its market share across banking, insurance and securities businesses.

China, including Hong Kong and the mainland, contributed around 44% of HSBC’s profit in 2022.