HSBC Holdings (00005) has announced that its indirect wholly-owned subsidiary, HSBC Bank Australia (HSBC Australia), has entered into an agreement to sell its Australian mortgage and personal loan portfolio to a fund managed by affiliates of Blackstone Inc. (Blackstone). The transaction is valued at approximately A$36 billion as of March 31, 2026.
Under the terms of the agreement, Virgo BidCo Pty Ltd, the buyer, will acquire the loan portfolio, which comprises residential mortgages and personal loans currently serviced by HSBC Australia. Pepper Money Limited will take over as the servicer of the portfolio after the sale, managing the ongoing administration and servicing of the loans. The sale is expected to result in a modest loss of less than US$100 million for the HSBC Group in the first half of 2027.
The remaining retail banking operations of HSBC Australia will be phased out gradually over the next 18 months. Following this, the bank's corporate, institutional, wealth management, and private banking businesses in Australia will be consolidated into the Sydney branch of The Hongkong and Shanghai Banking Corporation Limited, subject to regulatory approval. This restructuring is part of a broader effort to simplify HSBC's legal entity structure, with associated costs and write-offs expected to total around US$300 million.
Upon completion of the sale and the reduction of related business activities, HSBC anticipates reversing approximately US$300 million in cumulative foreign currency translation reserve losses to the income statement. The bank continues to invest in and expand its corporate and institutional banking operations in Australia and New Zealand, aiming to support the banking needs of its corporate and institutional clients. Additionally, HSBC is committed to growing its private banking and wealth management operations in the region.
The decision to sell the portfolio follows a strategic review of HSBC Australia's retail banking business, aligning with the group's ongoing efforts to streamline operations and focus on areas where it holds a clear competitive advantage. By concentrating on the most promising growth areas, HSBC Holdings aims to strengthen its leadership position and expand its market share.