HSBC sells $25 billion Australian loan portfolio to Blackstone

HSBC agreed to sell its A$36 billion, or about US$25.30 billion, Australian home and personal loan portfolio to Blackstone, a deal that deepens the bank’s exit from consumer lending in one of its long-standing markets. Blackstone said funds managed by Blackstone Credit & Insurance, Blackstone Tactical Opportunities and Blackstone Real Estate Debt Strategies signed a definitive agreement to finance the acquisition.

HSBC Australia said it is closing its retail banking business over the next 18 months and has already stopped new applications for products and services. Its FAQs said that from 31 July 2026 it was no longer offering new transaction accounts, savings and term deposits, or credit cards. The sale marks a sharp reset for a business that has operated in Australia for nearly 40 years.

Pepper Money Limited said it has binding arrangements to be appointed servicer of the portfolio of Australian home loans and personal loans originated by HSBC Bank Australia after the proposed acquisition by an entity wholly owned by funds managed by affiliates of Blackstone. Pepper Money said the portfolio had a book value of about A$36 billion as at 31 March 2026. The servicing arrangement matters for borrowers because it determines who manages repayments, customer contact and day-to-day administration after the loan book changes hands.

The transaction reflects a broader shift in global banking. Large multinational lenders have been pulling back from lower-growth consumer credit businesses that consume capital but deliver thinner returns, while private capital firms move in to buy assets that banks no longer want to hold. For HSBC, the sale frees balance sheet capacity that can be redirected toward businesses such as wealth management, corporate banking and cross-border financing, areas where the bank sees stronger strategic advantages.

For Blackstone, the deal extends its push into financial assets and credit strategies. By using capital from its credit, opportunistic and real estate debt platforms, Blackstone is positioning itself as a buyer of loan books that traditional banks are shedding. That gives the firm influence over a part of the market once dominated by deposit-funded lenders, and it can earn returns from scale, financing structure and servicing economics.

The transaction still needs regulatory approval. HSBC’s long presence in Australia, combined with the size of the portfolio and the role of Pepper Money in servicing it, means supervisors will be watching closely for any disruption to borrowers or to the wider lending market.