Prime Highlights:
HSBC is considering options for its consumer banking business in Australia, including a potential sale.
The bank is likely to retain its commercial banking operations in Australia, serving corporate clients globally.
The consumer banking business includes more than 40 branches, loan books, and retail customers, potentially attracting interest from major Australian banks.
Key Background:
HSBC Holdings Plc is reportedly considering strategic options for its consumer banking business in Australia, including the potential sale of its operations in the region. The move is part of the bank’s broader efforts to streamline its operations under the leadership of new CEO Georges Elhedery, according to sources familiar with the matter.
The British lender is likely to retain its commercial banking arm in Australia, which serves corporate clients globally, while reviewing the future of its consumer banking operations. This consumer segment, which includes more than 40 branches, a significant loan book, and a retail customer base, could attract interest from Australia’s major banks. However, the deliberations are still in the early stages, and HSBC may ultimately decide against a sale.
The potential divestment is seen as part of Elhedery’s ongoing overhaul of HSBC’s operations, which aims to simplify the nearly 160-year-old institution’s global structure. Under the restructuring, HSBC has created two major regional units: one covering Asia Pacific and the Middle East, and another for the UK, Europe, and the Americas. Hong Kong and the UK will remain standalone units within the bank.
In recent months, HSBC has also explored divesting various businesses in Europe, including its wealth management, custody, and fund administration units in Germany. Additionally, the bank completed a $10.1 billion sale of its Canadian business to the Royal Bank of Canada in 2024, following its exit from loss-making consumer operations in France and the US. HSBC established its Australian operations in 1965, acquiring a commercial banking license in 1986. The bank’s Australian consumer portfolio includes A$31.8 billion in mortgages, A$516 million in credit card debt, and A$538 million in other household loans, as of its latest disclosures.
Analysts suggest that any potential sale could be valued around $1 billion, with Australia’s “Big Four” banks being the most likely buyers. HSBC’s shift towards wholesale banking, rather than consumer banking, aligns with broader trends in the industry, including the recent consolidation of the Australian banking sector. In 2022, Citigroup sold its consumer banking unit to National Australia Bank, and ANZ Group Holdings acquired Suncorp Group’s banking arm in 2024.
