HSBC sells Singapore insurance arm to Allianz in £1.6bn deal
FTSE 100 HSBC has agreed to sell its health and life insurance business to German insurance giant Allianz for $2.1bn (£1.6bn) as it refocuses its strategy on Singapore’s wealth management.
The banking giant agreed to sell its Singapore business to Allianz in a transaction that is expected to be completed in the first half of 2027, subject to regulatory approval.
HSBC and the German insurance group will enter a 15-year partnership upon the deal’s completion, which will see the London-listed bank continue to sell insurance to its retail banking and wealth clients in Singapore, but it will be owned and underwritten by Allianz.
The deal is expected to generate a pre-tax gain of £1.4bn for HSBC, while the bank will also receive an additional £150.1m upfront payment.
The sale follows HSBC’s strategic review, which determined this deal would be the “best outcome” as part of the bank’s ongoing “simplification” of its group business.
HSBC focus on trimming its business
Chief executive Georges Elhedery, who took charge of the bank in 2024, has moved swiftly to overhaul its operations upon launching a major restructuring plan in October 2024.
The bank had aimed to achieve £1.1bn in annual cost reductions by the end of 2026, but accomplished this ahead of schedule in June.
Elhedery has said a large amount of savings have come from slashing its headcount, resulting in a 15 per cent reduction in managing director positions.
The banking group’s UK and Hong Kong businesses were turned into standalone units.
He also redrew the bank’s operations between the east and west regions at a time when falling interest rates were choking profit.
The deal with Allianz also comes after Elhedery rejected claims he plans to spin off the bank’s Asia business at a summit at the end of last year, arguing a banking presence in the region was “something our customers need”.
The firm said the shedding of its insurance business would allow it to focus on “areas where it has a clear competitive advantage”, while reaffirming its commitment to Singapore, calling it “crucial” to future growth.
Second chance for Allianz
The deal grants Allianz a second chance to tap into the Singapore market after it was forced to withdraw from a high-profile $2.2bn (£1.7bn) bid to buy Income Insurance in 2024 after the Singapore parliament raised concerns over the deal and amended the Insurance Act to prevent it from going forward.
Allianz expects this deal with HSBC to generate a double-digit return in the medium term.