LONDON: HSBC has agreed to sell its Australian home loan and personal loan business to funds managed by Blackstone, the bank announced Friday, marking the lender’s exit from retail banking in the country as part of a broader global simplification push.
Under the deal, HSBC Bank Australia will sell a portfolio of home and personal loans worth roughly 36 billion Australian dollars, or about $25 billion, to Virgo BidCo Pty Ltd, an entity owned by Blackstone-managed funds. The agreement was signed July 31 in Sydney, after trading hours closed on the London Stock Exchange on Wednesday.
Pepper Money Limited, an Australian and New Zealand non-bank lender, will service the loans once the sale closes.
The transaction is expected to close in the first half of 2027, pending regulatory approval from Australian authorities, including sign-off under the country’s foreign investment and banking laws and clearance from its competition watchdog.
HSBC said the sale would result in only a small loss, estimated at less than $100 million, once it closes.
Beyond the loan sale, HSBC said it would wind down the rest of its Australian retail banking operations over the next 18 months. The bank’s corporate and institutional banking, asset management and private banking businesses in Australia will then be folded into the Sydney branch of The Hongkong and Shanghai Banking Corporation Limited, streamlining the bank’s legal structure in the country.
HSBC expects to book about $300 million in restructuring costs and write-offs tied to the wind-down, and separately anticipates recognizing roughly $300 million in foreign currency translation losses by 2028 as it exits the businesses. The bank said the moves would have no additional impact on its core capital ratio.
HSBC said the sale price was set through a competitive auction and arm’s-length negotiations. The bank is also considering providing financing to Blackstone’s acquisition vehicle to help fund the purchase, on commercial terms, subject to regulatory approval.
The deal is the latest step in a yearslong effort by HSBC to focus its resources on markets and business lines where it holds a stronger competitive position, rather than spreading itself across smaller retail operations worldwide. The bank said it would continue investing in corporate, institutional, asset management and private banking work in Australia and New Zealand, even as it steps back from consumer lending there.
Blackstone, based in New York and listed on the New York Stock Exchange, is the world’s largest alternative asset manager, with more than $1.3 trillion in assets spanning real estate, private equity, credit and other strategies.
HSBC said certain securitization-related roles tied to a series of Australian mortgage trusts cannot be transferred at closing because of contractual and regulatory constraints, and it may seek to dispose of those remaining interests separately in the future.
The bank’s board said it considers the terms of the sale fair and in the interests of HSBC and its shareholders. Because of a cap on the deal’s total value, the transaction requires disclosure under Hong Kong Stock Exchange listing rules but does not need shareholder approval, and does not qualify as a significant transaction under U.K. listing rules.
