Global banking giant HSBC has unveiled a landmark deal that will end its four-decade-long retail banking operations in Australia, confirming it will offload its $36 billion domestic home and personal loan portfolio to private equity leader Blackstone. The transaction, announced publicly on Friday, forms the core of a planned 18-month wind-down of HSBC’s Australian retail banking division, a process that will wrap up with the deal’s expected closure in the first half of 2027.
Under the terms of the agreement, non-bank lending specialist Pepper Money Ltd has been tapped to serve as the portfolio’s servicer once the sale is finalized, with the firm tasked with delivering consistent, uninterrupted support to both borrowers and mortgage brokers throughout the transition. HSBC stressed that for the immediate future, existing retail customers will face no disruption to their everyday banking services, and no immediate action is required from account holders. The company confirmed it will proactively reach out to customers in coming months with detailed updates on upcoming changes to their product terms and access.
HSBC officials framed the decision as the outcome of a full strategic review of the Australian retail business, noting it aligns with the HSBC Group’s broader global push to simplify its operations and streamline its core focus areas. The local review launched shortly after George Elhedry took over as chief executive of HSBC Australia at the end of 2024, with internal leadership signaling the bank’s intent to exit the Australian market more than 12 months ago.
First entering the Australian market in 1986, when then-treasurer Paul Keating opened the domestic banking sector to foreign competition, HSBC never managed to capture a substantial share of the country’s competitive retail and mortgage market despite decades of operation. This exit is the latest in a string of global downsizing moves for the London-headquartered bank: in July, it completed the $2.1 billion sale of its Singaporean insurance business to European financial firm Allianz.
For Blackstone, the acquisition builds on the private equity firm’s rapidly expanding footprint in Australia, coming less than a year after it purchased data center operator AirTrunk for $23.5 billion in 2024. Mike Culhane, Blackstone’s Head of International Business Development, said the firm was eager to add the high-quality Australian home loan portfolio to its assets, while committing to delivering a seamless transition for all stakeholders. “This investment is a testament to the power of our franchise and our conviction in the growing opportunities in credit,” Culhane noted in a statement following the deal’s announcement.