HSBC sells US$25 billion Australian home and personal loan portfolio to Blackstone

[SYDNEY] HSBC is selling its A$36 billion (US$25.30 billion) Australian home and personal loan book to global asset manager Blackstone in the world’s largest-ever home loan portfolio transaction.

The deal, announced by the two companies on Friday (Jul 31), is the latest move in HSBC CEO Georges Elhedery’s overhaul of the bank. Elhedery has cut management ranks, reduced costs and shed non-core operations since assuming the top job in September 2024.

The sale of the Australian portfolio is to close in the first half of 2027, subject to regulatory approvals. Blackstone said the deal was the largest-ever sale of a home loan portfolio.

It said the portfolio would be held across the Blackstone Credit and Insurance, Tactical Opportunities and Real Estate Debt Strategies funds.

HSBC is only a minor player in Australia’s A$2.5 trillion mortgage market, which is dominated by the country’s “Big Four” banks. It does not operate a major retail branch network.

Blackstone said the loan portfolio would be managed by Pepper Money, a non-bank lender that operates in Australia. Pepper shares rose as much as 6 per cent on Friday, but the stock is down nearly 20 per cent this year.

HSBC’s Hong Kong shares rose 2.4 per cent on Friday to an all-time high of HK$168.5 (US$21.49), and were up 2.3 per cent by 0744 GMT, outpacing a largely flat Hang Seng Index. Shares in London rose 0.9 per cent to a record 1,601 pence (US$21.54) in the first hour of trading.

HSBC said it expected the sale would result in a loss of less than US$100 million by the first half of 2027, and that it would incur about US$300 million in restructuring costs linked to the retail wind-down.

It also expects to recognise about US$300 million in foreign currency translation losses, with no impact on its CET1 ratio.

SEE ALSO

HSBC nearing deal to sell Australia loans business to Blackstone: sources

Allianz to buy HSBC’s Singapore insurance unit for S$2.9 billion

Since the global financial crisis, HSBC has been scaling back its worldwide footprint, exiting low-returning consumer banking activities in markets ranging from France and Greece to Canada.

The bank last week agreed to sell its Singapore insurance unit to Germany’s Allianz, and struck a deal in May to divest its retail and wealth operations in Indonesia to Singapore’s Oversea-Chinese Banking Corp.

HSBC said it would continue investing in its corporate and institutional banking business across Australia and New Zealand, moving away from consumer lending as part of the restructuring.

Blackstone said separately it plans to continue deploying significant capital to tap Australia’s housing market.

The transaction comes as Australia’s housing market faces softer demand, with higher borrowing costs and tax changes weighing on investor activity.

Australian lender Westpac said in June mortgage applications had declined 10 per cent since the government’s May budget, while National Australia Bank on Thursday posted a 15 per cent drop in applications in the June quarter. REUTERS