HSBC has agreed to buy the Singapore unit of French insurance giant Axa as the British banking group expands its foothold in Asia, the companies announced yesterday.

HSBC makes 90 per cent of its profit in Asia and has said it plans to redouble efforts to seize more of the market in the region.

The bank has agreed to acquire Axa Singapore, the city-state's eighth largest life insurer, for $575 million (€487 million).

“This is an important acquisition that demonstrates our ambition to grow our wealth business across Asia,” HSBC chief executive Noel Quinn said in a statement.

“Wealth is one of our highest growth and highest return opportunities and plays to our strengths as an Asia-centred bank with global reach,” he said.

The bank said it plans to merge the operations of HSBC Life Singapore and Axa Singapore once the deal, which is subject to regulatory approval, is completed.

This is an important acquisition that demonstrates our ambition to grow our wealth business across Asia

As part of its Asia pivot, HSBC sold its 90 branches in the US this year and completed a long-running disposal of its unprofitable French retail business.

Singapore is a “strategically important scale market for HSBC, and a major hub for its ASEAN wealth business,” the banking group said, referring to the Association of Southeast Asian Nations.

Axa said it expects the transaction to be completed in the fourth quarter.The sale is part of Axa's “simplification journey” in the region, said the French insurer's Asia and Africa chief executive, Gordon Watson.

“In line with the Group's strategy, we are focusing on our core markets where we have the size, presence in the right business segments and a strong potential to grow,” Watson said.