HSBC offloads $25b home‑loan portfolio amidst Australia retail banking exit

It is seen as the world's largest home-loan portfolio transaction.

HSBC has agreed to sell its $25b (A$36b, HK$196b) Australian home-loan portfolio under a financing deal backed by Blackstone, in what the investment firm said is the world's largest home-loan portfolio transaction.

The transaction forms part of HSBC's plan to simplify its business. 

The bank said it will close its Australian retail banking operations in phases over the next 18 months, subject to regulatory approvals. 

Customers do not need to take any immediate action, and existing products and services will continue under their current terms for now.

Funds managed by Blackstone Credit & Insurance, Blackstone Tactical Opportunities and Blackstone Real Estate Debt Strategies have signed a definitive agreement to finance the acquisition of the portfolio.

The transaction adds to Blackstone's investments in Australia, where it has been active for almost 20 years, and supports its plans to expand its private credit business across Asia.

Dan Leiter, head of international at Blackstone Credit & Insurance, said international expansion remains a key priority for the firm's private credit business.

Pepper Money will manage the home loan portfolio following the transaction. The non-bank lender, which operates in Australia and New Zealand, will work with Blackstone to oversee the transfer from HSBC and continue servicing borrowers.