HSBC to Sell $25 Billion Australian Housing and Personal Loan Portfolio to Blackstone
HSBC Holdings said Friday that it has signed an agreement with Blackstone under which the U.S. investment firm will acquire HSBC’s Australian housing and personal loan portfolio of A$36 billion, or approximately US$25 billion. HSBC said it will close its remaining retail banking operations in Australia over the next 18 months. The sale will result in a non-material loss of less than US$100 million for the group, along with some restructuring costs and asset write-downs, HSBC said. The buyer is Virgo BidCo, a special-purpose vehicle wholly owned by a fund affiliated with Blackstone. The transaction is expected to close in the first half of 2027, subject to regulatory, competition and other approvals. Blackstone said in a statement that the deal is the largest housing-loan portfolio transaction globally to date and further strengthens its long-term investment commitment to Australia’s real estate market. “International expansion is a core focus of our private-credit business,” said Dan Leiter, global head of Blackstone Credit & Insurance International. “This investment demonstrates the strength of our platform and reflects our strong conviction in the growing opportunities in credit across the Asia-Pacific region.” Mike Culhane, international business development director responsible for asset finance, said Australian nonbank lender Pepper Money will provide ongoing loan-servicing services. “We have always viewed Australia as a highly attractive long-term credit investment market,” he said. As of the end of June, Blackstone’s credit platform, including BXCI and its real-estate debt business, had approximately US$547 billion in assets under management. The sale is widely viewed as the latest step in HSBC Chief Executive Georges Elhedery’s effort to streamline operations. Since taking the job, he has simplified the group’s regional management structure, exited smaller investment-banking businesses in the United States and Europe, and reduced layers of senior management. HSBC said its remaining retail operations in Australia will be closed in stages over the next 18 months. The bank will retain its corporate and institutional banking, private-banking and asset-management businesses in the country. Over a longer time frame, HSBC has exited consumer-banking businesses in several markets, including France, Greece and Canada, since the global financial crisis. Its exit from Australia’s retail market is widely seen as a continuation of the same strategy. Elhedery has repeatedly said HSBC is leaving markets where it lacks scale advantages and reallocating capital to businesses with competitive advantages and growth potential. From a market perspective, the large credit transaction comes as demand in Australia’s real-estate market is weak, mainly because changes in tax policy and higher borrowing costs have dampened investor appetite. Data released Thursday by National Australia Bank showed that mortgage applications in the June quarter—April, May and June—fell 15% from a year earlier. Banks have increasingly sold mortgage and consumer-credit assets in bulk to private-credit firms such as Blackstone and Apollo in global markets in recent years. In its first-quarter 2026 report, the Bank for International Settlements warned that when credit assets move from bank balance sheets to nonbank institutions, the credit risk is transferred rather than eliminated.
HSBC said it will close its remaining retail banking operations in Australia over the next 18 months. The sale will result in a non-material loss of less than US$100 million for the group, along with some restructuring costs and asset write-downs, HSBC said.
The buyer is Virgo BidCo, a special-purpose vehicle wholly owned by a fund affiliated with Blackstone. The transaction is expected to close in the first half of 2027, subject to regulatory, competition and other approvals.
Blackstone said in a statement that the deal is the largest housing-loan portfolio transaction globally to date and further strengthens its long-term investment commitment to Australia’s real estate market.
“International expansion is a core focus of our private-credit business,” said Dan Leiter, global head of Blackstone Credit & Insurance International. “This investment demonstrates the strength of our platform and reflects our strong conviction in the growing opportunities in credit across the Asia-Pacific region.”
Mike Culhane, international business development director responsible for asset finance, said Australian nonbank lender Pepper Money will provide ongoing loan-servicing services. “We have always viewed Australia as a highly attractive long-term credit investment market,” he said.
As of the end of June, Blackstone’s credit platform, including BXCI and its real-estate debt business, had approximately US$547 billion in assets under management.
The sale is widely viewed as the latest step in HSBC Chief Executive Georges Elhedery’s effort to streamline operations. Since taking the job, he has simplified the group’s regional management structure, exited smaller investment-banking businesses in the United States and Europe, and reduced layers of senior management.
HSBC said its remaining retail operations in Australia will be closed in stages over the next 18 months. The bank will retain its corporate and institutional banking, private-banking and asset-management businesses in the country.
Over a longer time frame, HSBC has exited consumer-banking businesses in several markets, including France, Greece and Canada, since the global financial crisis. Its exit from Australia’s retail market is widely seen as a continuation of the same strategy.
Elhedery has repeatedly said HSBC is leaving markets where it lacks scale advantages and reallocating capital to businesses with competitive advantages and growth potential.
From a market perspective, the large credit transaction comes as demand in Australia’s real-estate market is weak, mainly because changes in tax policy and higher borrowing costs have dampened investor appetite.
Data released Thursday by National Australia Bank showed that mortgage applications in the June quarter—April, May and June—fell 15% from a year earlier.
Banks have increasingly sold mortgage and consumer-credit assets in bulk to private-credit firms such as Blackstone and Apollo in global markets in recent years. In its first-quarter 2026 report, the Bank for International Settlements warned that when credit assets move from bank balance sheets to nonbank institutions, the credit risk is transferred rather than eliminated.