“Singapore serves as our Asia-Pacific headquarters and is central to our global growth strategy,” Baete said in the firm’s release on Friday. Singapore “is a nation that cares deeply about the well-being of its people.”
Allianz SE agreed to buy HSBC Holdings Plc’s Singapore insurance unit for S$2.7 billion ($2.1 billion), marking a substantial expansion less than two years after another deal in the city-state fell apart.
The two firms also agreed to enter a 15-year exclusive distribution partnership, allowing Allianz to provide insurance and other solutions to HSBC’s customers in Singapore, according to a statement released Friday.
The global bank will move to a capital-light bancassurance model in Singapore, allowing it to generate fee income without carrying capital reserves or maintaining underwriting books, in line with its long-term goal of being a leaner wealth manager.
For Germany’s Allianz, the deal offers a second chance to expand in Singapore after it withdrew an offer in 2024 to buy at least 51% of Income Insurance, formerly NTUC Income, following public concern and government intervention.
The transaction comes after Allianz withdrew an offer to buy a majority stake in Income Insurance Ltd. for about S$2.2 billion in December 2024. At the time the Singaporean government said the purchase shouldn’t proceed on the proposed terms, dealing a setback to Chief Executive Officer Oliver Baete’s effort to grow in Asia.
HSBC said the deal will generate a pre-tax gain of $1.8 billion and boost its common equity tier 1 ratio by as much as 15 basis points.
The bank’s Hong Kong-listed shares were down 1.1% in morning trade, in line with the wider market.
The sale is another step in CEO Georges Elhedery’s drive to simplify Europe’s largest bank and redeploy capital to businesses and markets offering stronger returns, while preserving Singapore as a wealth and wholesale banking hub.
“Singapore serves as our Asia-Pacific headquarters and is central to our global growth strategy,” Baete said in the firm’s release on Friday. Singapore “is a nation that cares deeply about the well-being of its people.”
Allianz’s shares were up 0.4% at 9:37 a.m. in Frankfurt, while HSBC was trading 1.2% higher in London.
The Allianz deal signals confidence in the market’s wealth-management growth, Bloomberg Intelligence analyst Steven Lam wrote on Friday. The new annual premium equivalent in Singapore is set to rise 15% or more in 2026, he added.
Adding the business would make Singapore one of the biggest markets in Allianz’s life and health segment in Asia, Lam had previously said.
For HSBC, the sale is part of the banking group’s efforts to simplify operations under Elhedery, who has cut management layers, jobs and businesses. The London-based lender said it expects the disposal to generate a pretax gain of $1.8 billion.
HSBC has previously said it’s committed to Singapore as an international wealth and wholesale banking hub.
The deal is expected to be completed in the first half of 2027, subject to regulatory approvals.