HSBC Sells A$36 Billion Australian Loan Portfolio to Blackstone
Synopsis
HSBC is exiting Australian consumer lending by selling its A$36 billion loan portfolio to Blackstone as part of its global restructuring strategy.
Key Highlights
- HSBC to sell a $36 billion Australian home and personal loan portfolio to Blackstone.
- The sale is the largest home loan portfolio sale globally.
- The transaction requires regulatory approvals and is likely to close in H1 2027.
In the largest home loan portfolio transaction ever in the world, HSBC has agreed to sell its A$36 billion Australian home and personal loan portfolio to global asset manager Blackstone.
The sale is the latest move in Chief Executive Georges Elhedery’s restructuring of the bank, which he launched in September 2024, that has so far included axing layers of management, slashing costs and exiting non-core businesses.
Deal Details
The deal is due to close in the first half of 2027 and it needs nods from regulators. The portfolio will be managed in the Blackstone Credit and Insurance, Tactical Opportunities and Real Estate Debt Strategies funds, according to Blackstone.
The loan portfolio is to be serviced by Australian non-bank lender Pepper Money, whose shares gained as much as 6% on announcement only to finish down around 20% from a year-to-date perspective thereafter.
HSBC is a small player in Australia’s A$2.5 trillion mortgage market, where the only even slightly new arrivals were those lenders like Macquarie who provide a lot to people who just want to pay off their credit card debt and stop paying interest on student loans much faster than they need to.
Financial Impact and Restructuring
HSBC forecasts that the sale would incur losses of less than US$100 million by the first half of 2027.
It also forecasts around US$300 million in restructuring costs from shutting its retail lending business, plus about US$300 million in losses on foreign currency translation, which will not be deducted from the bank’s CET1 capital ratio.
As part of its restructuring, HSBC said it would move away from consumer lending and continue to invest in its corporate and institutional banking business on the Australian and New Zealand (NZ) side.
Global Strategy and Housing Market
HSBC has been scaling down global consumer banking to focus on markets which yield better returns and withdrew from countries including France, Greece and Canada after the global financial crisis.
The bank clinched a deal last week to sell its Singapore insurance business to Allianz SE, while in May it directly sold its retail and wealth businesses in Indonesia operation to Oversea-Chinese Banking Corp (OCBC).
Blackstone says it will be investing more in the Australian housing market.
The transaction comes as higher borrowing costs and more aggressive tax changes in Australia have weighed heavily on housing market demand.
Westpac earlier in June said mortgage applications were down 10% since the federal government’s May budget, with National Australia Bank (NAB) saying its mortgage applications for the June quarter fell 15%.
Source: Reuters
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