HSBC Australia sells $36b retail loan book to Blackstone

HSBC Australia will sell its portfolio of local home loans and personal loans valued at $36 billion to Blackstone.

The sale is expected to complete in the first half of 2027, subject to regulatory approval.

The remainder of HSBC Australia's retail business will be wound down over the next 18 months following a strategic review, and forms part of the ongoing simplification of the HSBC Group.

"For now, customers can continue to bank with us as normal and will receive information from HSBC outlining the subsequent changes to the products held, noting there is no action required at this point," HSBC said.

Meanwhile, HSBC will continue to grow its corporate and institutional banking business across Australia and New Zealand to support corporates, institutions and superannuation funds. It also plans to grow its asset management and private banking businesses in Australia.

"HSBC is focused on increasing leadership and market share in the areas where it has clear competitive advantage and the greatest opportunities to grow and support its clients," it said.

Blackstone credit and insurance head of international Dan Leiter said: "International expansion is a major priority for our private credit business. Blackstone's global credit platform, deep origination capabilities, and long-standing relationships position us to deliver unique value to clients around the world."

"This marquee investment is a testament to the power of our franchise and our conviction in the growing opportunities in credit across Asia."

Following the wind down of the retail business, HSBC Australia's corporate and institutional banking, asset management and private banking businesses in Australia will be consolidated into the Hongkong and Shanghai Banking Corporation Sydney Branch, simplifying HSBC's entity footprint.

HSBC expects to incur US$0.3 billion in associated restructuring costs and write-offs.

The disposal of the loans portfolio, HSBC said, is expected to generate an immaterial loss of less than US$0.1 billion for the group by the first half of 2027.

Pepper Money will act as the servicer of the portfolio following the completion of the sale, providing ongoing support to customers and brokers.

Pepper Money provides residential home loans, as well as asset finance, commercial real estate and novated leases in Australia.

"With Pepper Money providing experienced local loan management, customers can continue to receive high standards of service. We strive to oversee this portfolio thoughtfully and with discipline and remain committed to Australia as a highly attractive market for long-term credit investment," Blackstone credit and insurance head of international business development for asset-based finance Mike Culhane said.