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HSBC has agreed to sell its Australian home and personal loan portfolio valued at AUD 36 billion (USD 25.3 billion) to Blackstone in what is being described as the world's largest home loan portfolio transaction. The deal forms part of HSBC's ongoing global restructuring strategy aimed at exiting non-core retail businesses and strengthening its corporate and institutional banking operations. Subject to regulatory approvals, the transaction is expected to be completed in the first half of 2027. Blackstone will manage the portfolio through multiple investment funds, with Pepper Money overseeing loan servicing in Australia.
HSBC has entered into an agreement to sell its Australian home and personal loan portfolio worth AUD 36 billion (USD 25.3 billion) to global asset manager Blackstone, marking what Blackstone described as the world's largest home loan portfolio transaction. The transaction is expected to be completed in the first half of 2027, subject to regulatory approvals.
The sale is part of HSBC's broader restructuring strategy under Chief Executive Officer Georges Elhedery, who has been reshaping the bank since taking charge in September 2024. The lender has been reducing management layers, lowering costs and exiting businesses that are no longer considered part of its long-term strategy.
According to Blackstone, the acquired loan portfolio will be held across its Blackstone Credit and Insurance, Tactical Opportunities and Real Estate Debt Strategies funds. The loans will be serviced by Australian non-bank lender Pepper Money, which manages lending operations in the country. Following the announcement, Pepper Money's shares gained as much as 6% during trading, although the stock remains nearly 20% lower for the year.
HSBC has only a limited presence in Australia's approximately AUD 2.5 trillion mortgage market, which continues to be dominated by the country's four largest banks. The lender also does not operate a significant retail branch network in Australia, making the exit from consumer lending consistent with its existing business strategy.
Investor sentiment remained positive after the announcement. HSBC's shares climbed to record levels in both Hong Kong and London. In Hong Kong, the stock rose as much as 2.4% to a historic high of HKD 168.5 (USD 21.49), while shares listed in London also touched a record level after gaining nearly 1% in early trading.
HSBC stated that it expects the transaction to result in a loss of less than USD 100 million by the first half of 2027. In addition, the bank expects to incur approximately USD 300 million in restructuring costs related to the closure of its Australian retail banking operations over the next 18 months. It also anticipates recognising around USD 300 million in foreign currency translation losses, while noting that the transaction will have no impact on its Common Equity Tier 1 (CET1) capital ratio.
The bank confirmed that it will continue investing in its corporate and institutional banking businesses across Australia and New Zealand, while gradually exiting consumer lending activities in the region. The move aligns with HSBC's wider global strategy of focusing on businesses that generate stronger long-term returns.
The Australian transaction follows several other strategic divestments completed by HSBC in recent years as it has scaled back its international consumer banking footprint. Since the global financial crisis, the bank has exited or reduced retail banking operations in several markets, including France, Greece and Canada. In the past week, HSBC also agreed to sell its Singapore insurance business to Allianz, while earlier this year it announced the sale of its retail and wealth management operations in Indonesia to Oversea-Chinese Banking Corporation (OCBC).
Blackstone, meanwhile, said it intends to continue investing significantly in Australia's housing finance market. The acquisition comes at a time when Australia's residential property sector is witnessing softer borrowing activity due to elevated interest rates and tax-related changes affecting investor demand. Recent industry data highlighted the slowdown, with Westpac reporting a 10% decline in mortgage applications since the federal budget announced earlier this year, while National Australia Bank recorded a 15% fall in mortgage applications during the June quarter.
Source Reuters
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