UPDATED: AXA to acquire HSBC's insurance arm

HSBC Singapore has announced it will be selling its employee benefits insurance businesses to AXA.

The group term life and group medical insurance portfolios are estimated to cost S$23.5 million and the deal is expected to be finalised in the second half of the year, it said in a statement.

All of HSBC's employee benefits staff will be offered positions at AXA, it added.

AXA will provide to both HSBC and its own clients after the acquisition, while HSBC will offer "AXA's employee benefits insurance policies under a 10-year bancassurance arrangement".

The deal will increase its employee benefits client base by about 28%.

HSBC has been on a fast track to streamline its business as financial institutions worldwide struggle to manage cost. The bank's 2012 profits fell by 16.5%, following the 2011 announcement that the bank was cutting 30,000 jobs globally in an effort to save up to US$3.5 billion (S$4.3b) by this year.

However, the bank assured employees in Singapore they will not be affected by the job cuts, with HSBC Singapore's CEO Alex Hungate saying in 2011 that the bank was "planning to hire up to 15,000 people in emerging markets over the next three years".