HSBC is selling its Australian mortgage and personal loan portfolio to Blackstone. The London-headquartered bank announced the transaction as part of a strategic review of its retail business in Australia.
The sale is expected to be completed in the first half of 2027, subject to regulatory approval. This transaction will end HSBC's decades-long retail presence in the country. The bank first gained a commercial banking licence for the Australian market in 1986.
Branch closures and service changes
HSBC will close all of its 19 Australian branches over the next 18 months. The closures will occur in a phased manner. Alongside the branch network shutdown, the bank will phase out non-mortgage retail products, including transaction accounts, savings and term deposits, and credit cards.
Despite the retail exit, HSBC will continue to operate private and institutional banking services in Australia. The bank stated that the decision forms part of the ongoing simplification of the HSBC group.
Transition and employment impact
Blackstone has appointed lending group Pepper Money to service the loans after the sale is completed. Pepper Money is expected to advertise roles that may be filled by current HSBC employees. HSBC employs approximately 2,000 people in Australia.
The bank indicated it will need the majority of its retail banking team during the wind-down period. Specific details regarding staff reductions remain pending regulatory clearance.
Market context
HSBC's consumer business in Australia holds about $36 billion of loans. Overseas banks have historically found it challenging to establish a profitable foothold in Australia's mortgage market.
Regulatory data shows that Australia's five biggest lenders control about 80% of the mortgage market. Several overseas banks, including the New York-headquartered Citi, have previously exited the Australian mortgage market.