HSBC studying options for consumer banking in Australia — Bloomberg
21 Jan 2025, 12:37 pm
main news image

(Jan 21): HSBC Holdings Plc is studying options for its consumer banking business in Australia, including a potential sale as the bank looks to further slim down its operations, according to people with knowledge of the matter.

The UK lender is likely to retain its commercial banking operations in Australia to serve its corporate clients globally, one of the people said, who asked not to be identified as information is private. The consumer banking business — which consists of more than 40 branches and offices as well as its loan books and retail customers in Australia — could attract other major banks in the country, the person said.

Deliberations are at an early stage and HSBC could decide against any deal, said the people. A representative for HSBC declined to comment.

Any divestment would be part of new chief executive officer Georges Elhedery’s sweeping overhaul that aims to simplify the nearly 160-year-old bank’s businesses. The bank recently created a new Eastern regional unit that included the Asia-Pacific and Middle East, and a Western market that included its non-ring-fenced bank in the UK, Europe and the Americas. Hong Kong and the UK will be standalone units.

HSBC has also explored selling various businesses in Germany including its wealth-management, custody and fund administration units, Bloomberg News reported last year. The UK bank completed a sale of its Canadian business to Royal Bank of Canada for US$10.1 billion (RM45 billion) in 2024 following its exit from loss-making consumer operations in France and the US.

Local operations

HSBC established its operations in Australia in 1965 and obtained a commercial licence in 1986, according to its website. In November, the lender reported A$31.8 billion in mortgages on its books, along with A$516 million in credit cards and A$538 million in other household loans, according to disclosures filed with the regulator.

Any transaction could be around US$1 billion and the four major Australian banks would be logical buyers if they had interest, according to Morningstar Inc’s senior equity analyst Michael Makdad. The country’s so-called big four have competed aggressively for years to win larger slices of the mortgage market.

“Outside the UK and the Hong Kong bank, HSBC is focusing now on wholesale banking rather than consumer banking,” Makdad said. “It’s natural that they may want to sell the Australian consumer business to fit that strategy.”

That industry has been consolidating in recent years. In 2022, Citigroup Inc sold its consumer unit in the country to National Australia Bank Ltd. ANZ Group Holdings Ltd, which will have former HSBC banker Nuno Matos become chief executive officer in July, completed its purchase of Suncorp Group Ltd’s banking arm last year.

Uploaded by Magessan Varatharaja

Print
Text Size
Share