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The sale is expected to complete in the first half of 2027, subject to regulatory approvals, and according to Blackstone, will be one of the largest home loan portfolio deals ever completed globally.
Non-bank lender Pepper Money is set to manage the loan book, while the remainder of HSBC Australia’s retail business not included in the sale will be wound down over the following 18 months.
HSBC said customers could continue banking as normal and would receive further information about any changes to their products in due course, with no action required at this stage.
The bank said the decision followed a strategic review of its Australian retail business and formed part of the HSBC Group’s ongoing simplification strategy.
“HSBC is focused on increasing leadership and market share in the areas where it has clear competitive advantage and the greatest opportunities to grow and support its clients,” the bank said.
While HSBC is exiting retail banking, the bank said Australia would remain an important market for the group. It plans to continue investing in its corporate and institutional banking business as well as its private banking and asset management operations, which will continue operating locally.
HSBC first established an Australian presence in 1964 before receiving a full commercial banking licence in 1986. It expanded into personal and retail banking in the mid-1990s.
Pepper Money to service customers and brokers
Under the agreement, Pepper Money will become the servicer of the portfolio once the transaction completes, providing ongoing support to customers and brokers.
The non-bank lender, which has more than 26 years’ experience managing loan portfolios and servicing customers, said it would also advertise roles for HSBC Australia employees in the coming months as part of the transition.
Pepper Money said the transaction was aligned to the non-bank’s “strategy to grow its capital-light servicing business”.
“Pepper Money’s appointment as the loan manager reflects the strength of our established platform and our experience supporting customers across large, complex portfolios. For more than 26 years, we have both originated and serviced loans on behalf of third parties,” said Pepper Money’s chief executive officer, Mario Rehayem.
“With the scale, systems and focus on customer care, we are well placed to provide a positive customer and partner experience through transition.
“Alongside Blackstone and HSBC, our focus will be on disciplined execution, continuity for customers and clear, genuinely helpful support at every step.”
Blackstone, meanwhile, will acquire a portfolio with a total book value of approximately $36 billion.
“This represents the largest home loan portfolio transaction globally, demonstrating Blackstone’s ability to deliver scaled, complex capital solutions to back leading financial institutions and critical sectors of the real economy,” said Blackstone in a statement.
[Related: HSBC sets out fraud response after $35m penalty]
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