The Chinese conglomerate has signed a pact with Citigroup. The Asian firm has bought a number of Western financial firms, including private banks.

The Asian financial group Fosun International, which has bought private wealth firms and is rumored to be bidding for a German bank, has agreed a strategic co-operating pact with Citigroup.

The two parties said they are “committed to jointly supporting the future development strategy of Fosun International and its subsidiaries”.

Wang Qunbin, chief executive of Fosun International, Jan Metzger, Citi APAC head of banking, capital markets and advisory, and Christine Lam, CEO of Citi China attended the signing ceremony at the Bund Finance Center, Shanghai.

“The current cooperation spans our three core businesses, namely 'Health, Happiness and Wealth', with Citi sharing a common strategic vision with Fosun. Through this partnership, Fosun can leverage Citi's vast network and resources across the world to continuously further enhance and accelerate the global growth strategy of Fosun, particularly to strengthen our core industrial operation capabilities, pursue our technology-driven development strategy and further expand investment in innovation,” Wang Qunbin said.

Such a pact between a Hong Kong-listed Chinese conglomerate and one of the world’s largest US banks in some ways bucks a trend of more difficult US-China trading relationships in recent years, as shown by tariff hikes by the Donald Trump administration and counterparts in Beijing. That said, banks such as Citigroup are major players in Asia, and mindful of the region’s growing affluent middle class. Citigroup has had an office in Shanghai since 1992 and one of the first international banks to locally incorporate in China. 

The pact puts Citigroup in a relationship with a firm reporting about $16.5 billion of revenues last year; as of June 30, it had assets worth about $99.13 billion.

Fosun has been rumored to be considering a bid for Germany’s Bankhaus Lampe, the private bank. A few days ago Bloomberg reported that Fosun is thinking of buying the firm in a deal that could value it at €200 million ($221.9 million). Other investors, such as Netherlands-based ABN AMRO, are also considering a bid, reports said. (Fosun has not commented; this publication has contacted Oetker Group, owner of Bankhaus Lampe, for comment and may update in due course.)

The Chinese conglomerate has added a number of Western assets to its portfolio. For example, In November 2018, Fosun concluded its purchase of a 69.14 per cent stake of Guide Investimentos from Brazil's central bank. Fosun paid R$167.9 million ($45 million) for the business, and a further R$120 million which is dependent on how well the firm performs in future.

Fosun also bought Hauck & Aufhäuser in 2016. Fosun - founded in 1992 – holds firms across different sectors, including wealth managers and private banks. Its acquisition strategy involves buying Western wealth management businesses. In January this year, for example, Fosun forged a strategic pact with UK-listed Standard Chartered. Last March, Fosun signed a co-operation pact with HSBC as part of its growth plans. In 2015, Fosun launched a financial platform for its investment and asset management business in Russia and neighboring countries. However, not all of its bids have been successful: in 2015 it pulled out of an attempt to acquire BHF Kleinwort Benson. 

A few days ago Fosun also bought the brand of Thomas Cook, the renowned British tourism and travel company that collapsed in September with the loss of about 2,500 jobs.