Signage for HSBC Holdings Plc headquarters is displayed on the building that houses its headquarters in the central business district (CBD) of Singapore, Jan 28, 2021. (PHOTO / BLOOMBERG)

HSBC Holdings Plc agreed to buy AXA Singapore for US$575 million in a push to build a global wealth hub in Singapore and fuel its expansion across Southeast Asia.

The acquisition will give HSBC the eighth largest life insurer in Singapore, as well as a leading group health insurance firm, with assets of US$474 million, according to a statement.

Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach.

Noel Quinn, Chief executive officer of HSBC Holdings Plc

“This is an important acquisition that demonstrates our ambition to grow our Wealth business across Asia,” Chief Executive Officer Noel Quinn said in a statement. “Wealth is one of our highest growth and highest return opportunities, and plays to our strengths as an Asia-centred bank with global reach.”

The London-based bank is in the midst of a pivot to Asia, pouring billions into the region as it exits unprofitable business elsewhere. 

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HSBC has outlined ambitious plans to expand in wealth management. It plans to hire more than 5,000 new wealth planners to grow its business over the next three to five years, boosting its fee-based income amid rock-bottom interest rates.

HSBC’s Chief Financial Officer Ewen Stevenson said in August that the bank was looking into several “smaller opportunities” in wealth acquisitions across Asia. That would include three or four potential deals of about US$500 million each, he said.

The acquisition marks a turnaround for the lender, which mostly has been busy letting go of assets in recent years. It agreed to sell retail operations in both France and the US this year as it streamlines its operations outside Asia.

“We’ve been really public that Singapore is a strategically important scale market for the group,” said Bryce Johns, global chief executive officer of HSBC Life and Insurance Partnerships, in a call from Singapore. “We intend to accelerate our franchise growth here both as a global wealth hub and a wholesale gateway into Asean.”

The combined business would also be the fourth-largest retail health insurer in Singapore, with over 600,000 policies in force, HSBC said.

READ MORE: HSBC continues its pivot to Asia

The deal is subject to regulatory approval and HSBC said it expects it to immediately add to the group’s earnings. The purchase will be funded by existing resources and have a minimal impact on HSBC’s common equity tier 1 ratio.