HSBC has agreed to acquire Axa’s Singapore operations in a bid to boost its fee incomes in the Asia market.
HSBC said in a statement that the combined unit comprising HSBC Life Singapore and Axa Singapore would be the seventh-largest life insurer and the fourth-largest retail health insurer in Singapore.
HSBC currently ranks 10th in life insurance in Singapore, and does not have a health insurance business.
With the deal going ahead the merged firms would have over 600,000 policies in-force covering life, health and property and casualty insurance.
The Asia-focused bank is battling poor returns from lending in a low interest rate environment. It is looking to increase customer fee income in areas such as asset and insurance management.
It had announced back in the winter that it was planning to invest $3.5bn into its wealth and personal banking business in Asia.
Axa said the deal with HSBC was subject to regulatory approvals and would probably close by the fourth quarter.
HSBC said Axa Singapore would provide it access to a sizeable tied-agency sales force, many leading independent financial advisory firms, and a large pool of insurance policyholders and corporate relationships.