HSBC to sell US$25b of Australian home loans to Blackstone at a loss of less than US$100m

HSBC Holdings has reached an agreement to sell its Australian home loan portfolio, valued at US$25 billion, to a Blackstone unit in a deal expected to incur a minimal pre-tax loss of less than US$100 million by the first half of 2027. The sale price, determined by the portfolio's January end value of A$36 billion (US$25 billion), plus a premium due to shifts in interest rates, collections, and expenses, will be utilized for HSBC's corporate purposes.

Meanwhile, HSBC Australia's retail business will be phased out over the next 18 months. The bank's decision stems from a strategic review of its retail operations, as part of the ongoing simplification of the HSBC Group. Following the completion of the sale, HSBC Australia's corporate and institutional banking, asset management, and private banking businesses will be consolidated under the Hongkong and Shanghai Banking Corporation Sydney branch.

HSBC anticipates restructuring costs and write-offs amounting to US$300 million. The transaction, being the largest home loan portfolio deal globally, highlights Blackstone's capacity to provide extensive capital solutions to key financial institutions and sectors. Blackstone, the buyer, is an Australian entity wholly owned by affiliates of Blackstone.

HSBC shares surged 2.4% following the announcement on Friday morning, reaching a one-year high of HK$168.5, before closing at HK$168.2. The bank will disclose its first-half results next Tuesday.