Citi Group said it intends to sell its China portfolio, which includes deposits and other assets in mainland China but excludes credit cards, mortgages, and other loans, to HSBC.
The decision comes amid the U.S. bank's intention to wind down its consumer franchise in Asia, which was launched two years ago.
"We are taking important steps to exit our consumer banking business in China and continue to make progress on divestitures as part of our strategy to simplify Citi. This is an excellent outcome for our local consumer wealth and client colleagues in China," said Titi Cole, Citi's Head of Legacy Franchises.
The portfolio is valued at $3.6 billion, Nikkei Aasia reported.
In contrast to Citi, HSBC is looking to expand its business in China, as it expects the country's population with a net wealth of at least $250,000 to double to more than 350 million by 2030.
"Mainland China is central to our ambition to become the leading wealth manager in Asia. This investment will enable us to further develop our core wealth management business at HSBC Bank China," said Nuno Matos, CEO of Wealth and Personal Banking.
Notably, in April 2021, Citi announced that it would exit 14 consumer franchise markets in Asia, Europe, the Middle East, Africa, and Mexico.
In Asia, Citi Group completed the sale of its Taiwanese consumer banking unit to DBS Bank in August last year. Singapore-based United Overseas Bank announced its intention to acquire Citi's unsecured and secured loan portfolios, as well as its asset management and retail operations in Thailand, Malaysia, Indonesia, and Vietnam, for $3.6 billion.
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