HSBC is selling its A$36 billion ($25.30 billion) Australian home and personal loan book to Blackstone, the largest home loan portfolio sale on record.
The deal, announced Friday, is the latest move in CEO Georges Elhedery’s overhaul. Since taking the top job in September 2024, he has cut management ranks, stripped costs and shed non-core operations. The sale is set to close in the first half of 2027, subject to regulatory approvals.
Blackstone will hold the portfolio across its Credit and Insurance, Tactical Opportunities and Real Estate Debt Strategies funds, with Pepper Money, a non-bank lender in Australia, managing the loans. Pepper shares rose as much as 6% on Friday, though the stock is down nearly 20% this year.
HSBC is only a minor player in Australia’s A$2.5 trillion mortgage market, long dominated by the “Big Four” banks, and it runs no major retail branch network. It will now wind down its Australian retail business over 18 months and refocus on corporate and institutional banking across Australia and New Zealand.
Investors approved. Hong Kong-listed shares rose 2.4% to an all-time high of HK$168.5, outpacing a flat Hang Seng Index. London shares rose 0.9% to a record 1,601 pence.
HSBC expects the sale to produce a loss of under $100 million by H1 2027, plus about $300 million in restructuring costs and roughly $300 million in foreign currency translation losses, with no impact on its CET1 ratio.
The move fits a long retreat. Since the global financial crisis, HSBC has exited low-returning consumer banking from France and Greece to Canada. Last week it agreed to sell its Singapore insurance unit to Allianz; in May it struck a deal to offload its Indonesian retail and wealth operations to OCBC.
Blackstone said it plans to keep deploying capital into Australia’s housing market, even as demand softens under higher borrowing costs and tax changes. Westpac said in June that mortgage applications had fallen 10% since the May budget, and National Australia Bank reported a 15% drop in the June quarter.
The Herald View: HSBC is done pretending it can be everything everywhere. Selling a $25 billion mortgage book it never scaled, at a modest loss, to focus on corporate and institutional clients is discipline, not retreat. The more interesting side is Blackstone, buying Australian mortgages into a softening market. One party is exiting consumer lending; the other thinks now is the moment to own it. Both can’t be right.