HSBC set to acquire India’s L&T Investment Management in $425m deal

HSBC has said it will buy the investment management unit of India’s L&T Finance Holdings in the latest push to build up the Asian wealth and investment business that is at the forefront of the bank’s turnaround plans.

The London-based lender said it had agreed terms to acquire L&T Investment Management, which had looked destined to be bought by Blackstone after the US fund management group was reported to be exploring a bid.

The purchase comes four months after HSBC agreed to a deal to buy AXA Singapore for $575 million. HSBC has said it was looking to make three or four bolt-on acquisitions of around $500m each.

“This transaction enhances the strength of our business in India and reinforces our status as one of Asia’s leading wealth managers,” HSBC chief executive Noel Quinn said.

“This demonstrates our commitment to capturing the Asia wealth opportunity. We will continue to invest significantly to achieve that goal.”

LTIM had assets under management of $10.8 billion and more than 2.4 million active accounts as of September, the statement said. The proposed acquisition will be funded from existing resources.

India has become a key market for HSBC as it looks to expand its operations in Asia, which are already the mainstay of the bank's revenue and profits. Overall, India is one of the bank’s largest markets and it made a little more than $1bn in the country in 2020, making it the lender’s third-largest Asian profit centre after Hong Kong and mainland China.

HSBC is in the midst of a strategic refresh in which the bank pivot its business increasingly towards Asia and in particular focus on managing a greater share of the region’s growing wealth.

Surendra Rosha, co-chief executive of Asia Pacific at HSBC, said the acquisition would provide the bank with “deeper access” to the Indian market.

“India’s rising income levels and higher life expectancy are driving an expanding yet underpenetrated sector,” he said in a statement.

HSBC’s various wealth and asset management businesses managed $1.2 trillion on behalf of its clients at the end of the first half of 2021. This was up more than $200bn year-on-year, reflecting growth in assets across all its units.