HSBC Bank Australia has agreed to sell its Australian home and personal loan portfolio to Blackstone, in a deal covering assets with a book value of approximately $36 billion (US$25 billion).
The portfolio will be acquired by Virgo BidCo, a vehicle wholly owned by funds managed by Blackstone affiliates, with the final purchase price to be adjusted before completion to reflect factors including new loan originations.
The sale marks a significant step in HSBC's retreat from Australian retail banking.
Under the agreement, Pepper Money — a major Australian non-bank lender with more than 26 years in lending and portfolio servicing across a range of asset classes — will take over as servicer of the portfolio once the sale completes, continuing to support both customers and brokers.
The transaction is expected to close in the first half of 2027, pending regulatory approval. HSBC said it would work with Blackstone and Pepper Money to ensure a smooth handover for existing borrowers and confirmed Pepper Money will advertise roles that current HSBC Australia staff can apply for in the coming months.
Blackstone said the deal is being financed through funds managed by Blackstone Credit & Insurance, Blackstone Tactical Opportunities, and Blackstone Real Estate Debt Strategies, describing it as the largest home loan portfolio transaction globally.
The remainder of HSBC Australia's retail business, covering transaction accounts, savings and term deposits, credit cards, foreign currency accounts, and wealth and investment products, will close in phases over the next 18 months. Customers not part of the Blackstone sale can continue banking as normal in the meantime, with further detail to come on changes to their products.
The bank framed the move as part of a broader group-wide simplification strategy, aimed at concentrating resources on business lines where it holds stronger competitive positioning, and added the disposal is expected to result in only "an immaterial loss for the HSBC Group."
The sale is part of a wider restructuring under CEO Georges Elhedery, who has reorganised the bank along East-West lines and exited sub-scale investment banking businesses in the US since taking over in September 2024, Reuters reported.
That restructuring push extends to where HSBC is choosing to grow, not just retreat. The bank said it intends to keep investing in its corporate and institutional banking, private banking, and asset management arms in Australia, which will continue operating under the HSBC brand.
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