HSBC reviews Singapore insurance unit amid high growth focus on Hong Kong, mainland China

HSBC Holdings’ exploration of options for its insurance business in Singapore may lead to a sale of the unit as the group reallocates resources to its insurance business in Hong Kong and mainland China, according to analysts.

“It makes sense for HSBC to consider an exit from Singapore’s insurance market to focus on Hong Kong and mainland China, as so many mainlanders are coming to Hong Kong to buy insurance products here,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.

“The review will only cover HSBC Life Singapore and will consider all options for the insurance manufacturing business, with no decision made,” HSBC said in a statement on Friday.

The revelation of the review came just a week after HSBC succeeded in its bid to buy out the remaining 37 per cent of Hang Seng Bank that it did not already own. On January 8, Hang Seng Bank shareholders approved the lender’s privatisation by the parent company at a total cost of HK$106.6 billion (US$13.6 billion).

“The review is part of the group’s ongoing simplification globally,” the bank’s statement said. “HSBC is focused on increasing leadership and market share in the areas where it has a clear competitive advantage and where it has the greatest opportunities to grow and support its clients.”

HSBC CEO Georges Elhedery in February last year unveiled his plan to redeploy US$1.5 billion from “low-return” areas to high-growth ­businesses in Hong Kong, mainland China, India and other Asian markets.

In the third quarter, it exited Sri Lanka retail banking and Malta. Earlier last year, it sold its private bank in Germany and an insurance business in France, and decided to exit investment banking in Europe and the US.