Private Credit Firms Target HSBC Australia Sale

Major private credit firms are expressing strong interest in HSBC's $40 billion Australian retail loan portfolio as the bank prepares to exit the local market. Their involvement could influence who holds key financial licences in the country.

HSBC is reportedly planning to sell its Australian retail banking business. Top global private credit and equity firms are seen as leading contenders. While major Australian banks have also shown early interest, internal challenges related to integration and existing investment focus may limit their ability to pursue the acquisition. This could leave the field open for non-bank players with greater flexibility.

HSBC, which is Europe’s largest bank by assets, has appointed Citi to manage the sale. The transaction is consistent with HSBC’s global strategy to streamline operations and concentrate on core markets in the UK, Hong Kong and the wider Asia region. The bank exited US retail banking in 2021 and sold its Canadian division in 2022, marking a clear move away from less strategic regions.

Analysts estimate the Australian unit includes approximately $40 billion in outstanding loans and about $30 billion in customer deposits. The final valuation will depend on the buyer’s approach to managing deposits and funding, though the deal is expected to be worth several billion.

Firms believed to be interested include Ares, Apollo Global Management, Cerberus, Bain Capital, Blackstone, Metrics Credit and MA Financial. These private giants could absorb the loan portfolio but may opt to give up HSBC’s local banking licence. This raises questions about regulatory oversight and could affect concentration within the market.

The potential sale fits within HSBC’s broader structural plan to focus on markets offering stronger long-term prospects while streamlining operations elsewhere. Whether a domestic bank or a private credit firm ends up acquiring the business, the outcome is likely to shift the landscape of Australian retail banking.

Source: The Australian, Banking Day, MPA Magazine

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