HSBC Holdings (HSBC) has agreed to acquire the Singapore assets of AXA for $575 million as it expands its wealth management business footprint across Asia, according to a Reuters report.
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Shares of the European Bank fell around 1.4% in early trading on Monday. (See HSBC Holdings stock charts on TipRanks)
AXA’s Singapore unit reported net assets of $474 million at the end of 2020, with annualized new premiums of $85 million and gross written premiums of $739 million.
The acquisition is expected to boost the fee income for HSBC from insurance and asset management businesses. It will also provide a gateway to a substantial sales force, numerous leading independent financial advisory firms, insurance policyholders, and significant corporate relationships.
The combined entity, including HSBC Life Singapore and Axa Singapore, will become the seventh-largest life insurer and the fourth-largest retail health insurer in Singapore.
Currently, HSBC is the 10th largest life insurer in Singapore but does not have a health insurance business.
The acquisition is expected to close by the end of the fourth quarter, subject to certain regulatory approvals.
Morgan Stanley analyst Nick Lord recently maintained a Hold rating on the stock.
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys and 1 Hold.
TipRanks data shows that financial blogger opinions are 100% Bullish on HSBC, compared to a sector average of 70%.
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