The news: HSBC has sold its $36 billion home and personal loan portfolio to alternative asset giant Blackstone, with Pepper Money to act as the new servicer.
The context: The sale is expected to be completed in the first half of 2027, subject to approval from regulators. It is expected to generate an immaterial loss for the group which will provide a Q2 update on Tuesday next week.
The sale will generate job losses at HSBC with impacted employees able to apply for the new loan servicing positions at Pepper Money.
The bank will wind down the remainder of its retail operations in Australia — including transaction accounts, savings and term deposits, credit cards, foreign currency accounts, wealth and investment products — over the next 18 months.
It will continue to invest in its local corporate and institutional banking, private banking and asset management businesses.
The sale follows a strategic review which saw the global bank decide to simplify the group and focus on its competitive advantages in corporate and institutional where client numbers have grown 30%.
What they said: In a statement Blackstone said it represented the largest home loan portfolio transaction globally, as it looks to continue the international expansion of its private credit book.
“This marquee investment is a testament to the power of our franchise and our conviction in the growing opportunities in credit across Asia,” head of international for Blackstone credit and insurance Dan Leiter said.
“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,” Pepper Money chief executive Mario Rehayem said.