HSBC Insurance (Asia Pacific) Holdings, an indirect wholly-owned subsidiary of HSBC Holdings, has completed the acquisition of its 100% stake in AXA Singapore for a consideration of US$529 million ($710.2 million).
The consideration is US$46 million less than the initial consideration of US$575 million when the announcement of the acquisition was first made in August 2021.
According to HSBC, the move accelerates the bank’s ambition to become Asia’s leading insurance and wealth provider. AXA Singapore’s operations complement HSBC’s existing local insurance business, HSBC Insurance (Singapore) Pte Ltd (HSBC Life Singapore).
“AXA Singapore’s large retail and corporate customer base, multiple distribution channels, and complementary insurance products will allow HSBC to materially scale up and diversify its insurance and wealth business in Singapore,” says HSBC in its Feb 11 statement.
AXA Singapore is the eighth largest life insurer in Singapore by annualised new premiums. It is the country’s fifth largest property and casualty insurer by gross written premiums.
As at Dec 31, 2020, AXA Singapore had net assets of US$474 million, annualised new premiums of US$85 million, gross written premiums of US$739 million and profit before tax of US$23 million.
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“Asia’s growing middle class, high savings rate and resilient economic growth are creating huge opportunities in the region’s wealth management industry. Our acquisition of AXA Singapore significantly boosts our ability, as an Asia-centric bank, to serve the wealth and protection needs of people in this dynamic region, and to further execute on our strategy of being Asia’s leading wealth manager,” says Surendra Rosha, Co-CEO, Asia-Pacific at HSBC.
Kee Joo Wong, Chief Executive Officer of HSBC Singapore, adds: “This acquisition is not just about expanding our insurance capabilities in Singapore, but about building a more holistic banking and wealth management platform for both retail and corporate clients. As we integrate the two insurance operations, customers can look forward to a best-in-class offering across life insurance, healthcare, wealth and banking to meet their needs.”
The consideration for the acquisition was funded from existing resources and has a minimal impact of 5 basis points on HSBC’s common equity tier 1 (CET-1) ratio. The acquisition is immediately accretive to the group’s earnings, says the bank.
