Key facts
- HSBC is selling its A$36 billion ($25.3 billion) Australian home and personal loan portfolio to Blackstone.
- The sale marks HSBC's phased exit from retail banking in Australia.
- The transaction is expected to close in the first half of 2027, subject to regulatory approvals.
- Blackstone plans to continue deploying capital to support Australia's housing market.
- HSBC will maintain its corporate and institutional banking business in Australia and New Zealand.
- HSBC anticipates a loss of less than $100 million and restructuring costs of approximately $300 million from the disposal.
HSBC announced on Friday that it will sell its Australian home and personal loan portfolio, valued at A$36 billion ($25.3 billion), to investment firm Blackstone. This strategic divestment signifies HSBC's phased withdrawal from retail banking operations in Australia.
The sale is a key component of CEO Georges Elhedery's broader strategy to streamline the bank's operations, enhance returns, and reallocate capital towards higher-growth business areas. Since taking the helm in September 2024, Elhedery has implemented cost reductions, management restructuring, and divested non-core assets to reshape HSBC's global presence.
This move follows recent divestments, including the agreement to sell its Singapore insurance unit to Germany's Allianz SE and the May deal to divest retail and wealth operations in Indonesia to Singapore's Oversea-Chinese Banking Corp. HSBC has been progressively scaling back its global footprint since the global financial crisis, exiting low-return consumer banking activities in various international markets.
The Australian portfolio will be acquired by Virgo BidCo, a subsidiary of funds managed by Blackstone affiliates. The transaction is anticipated to be completed in the first half of 2027, pending regulatory and competition approvals. Blackstone, which has invested in Australia for nearly two decades, indicated plans for continued significant capital deployment in the country's housing market.
HSBC affirmed its commitment to its corporate and institutional banking business in Australia and New Zealand, emphasizing the strategic shift away from consumer lending. The sale occurs amidst a cooling Australian housing market, influenced by increased borrowing costs and tax policy changes affecting investor activity. Lenders like Westpac and National Australia Bank have reported a notable decrease in mortgage applications.
HSBC projects the disposal will result in a loss of less than $100 million by mid-2027 and incur approximately $300 million in restructuring costs associated with the retail banking wind-down. The bank also anticipates recognizing around $300 million in foreign currency translation losses, with no anticipated impact on its CET1 ratio.