Blackstone seals $36b deal for HSBC Australian home and personal loans book

HSBC will sell its $36 billion Australian home and personal loans book to Blackstone and close the rest of its retail bank after four decades, in a deal affecting more than 91,000 mortgage customers.

The blockbuster deal, described by Blackstone as the biggest mortgage portfolio sale in history, is expected to close in the first half of 2027, subject to regulatory approval.

The sale gives Blackstone a major foothold in Australian household lending as private capital groups pour more money into assets traditionally held by banks.

Pepper Money will service the loans for Blackstone after completion, handling repayments, customer inquiries and broker relationships.

The non-bank lender is majority owned by KKR, one of Blackstone’s biggest private capital rivals.

Borrowers do not need to take any action for now and will remain with HSBC until the handover is completed.

HSBC said the exit followed a “strategic review”, as it retreats from businesses where it lacks the scale to compete with Australia’s major banks.

The deal comes as Australia’s mortgage market loses momentum, with elevated borrowing costs and tax changes weighing on investor demand.

Westpac has reported a 10 per cent fall in home loan applications since the May Budget, while NAB said applications dropped 15 per cent in the June quarter.

The lender will separately wind down its remaining Australian retail bank over the next 18 months, closing transaction and savings accounts, term deposits, credit cards, foreign currency accounts and wealth products.

HSBC said the move would allow it to focus its Australian operations on corporate and institutional banking, private banking and asset management.

The bank had originally entered the market in 1986.

Blackstone executive Mike Culhane said the firm was buying a “high-quality Australian home loan portfolio” and would work with Pepper to maintain competitively priced loans and customer service.

“With Pepper Money providing experienced local loan management, customers can continue to receive high standards of service,” he said.

Pepper chief executive Mario Rehayem said the non-bank lender’s priority would be “continuity for customers” during the handover.

The companies have not disclosed how many jobs will be lost or transferred, though Pepper plans to advertise roles and HSBC employees will receive more information in coming months.

HSBC expects the sale itself to generate only a modest loss of less than $US100 million by the first half of 2027.

The broader exit will carry larger one-off costs and accounting impacts, including $US300m in restructuring costs and write-offs and a further $US300m of foreign currency translation reserve losses to be recycled through the income statement after the sale and wind-down are completed.

HSBC Holdings shares rose 2.5 per cent in London to 1586.56p. Pepper Money shares jumped 6.6 per cent to $1.76.