The British bank's acquisition of a 50.1 per cent share in life insurance company Erisa and Erisa IARD, which specializes in property insurance, is part of the bank's chairman Richard Lindsay's stated aim that 20 per cent of its profits will be derived from insurance products by 2012.
Kent Yau of Core Pacific-Yamaichi International told Bloomberg: "This signals HSBC's ambitions in building up its insurance presence. Insurance is a field that will really let HSBC ride on its commercial banking strengths, such as its networks and client relationships.''
The deal is expected to be closed by July 2nd, pending approval from French regulatory bodies.
Like other investment banks, HSBC's recent financial performance has been afflicted by meltdown in the US subprime mortgage market with second-half net income for the bank showing a 5.7 per cent decline.