HSBC Holdings Evaluates Options for Australian Consumer Banking Business
Potential Sale amidst Global Restructuring Efforts
HSBC Holdings is weighing options for its consumer banking operations in Australia, including a possible sale, sources familiar with the matter revealed. The UK lender is likely to retain its commercial banking operations in the country, serving its global corporate clients.
The consumer banking business, consisting of over 40 branches, offices, and loan books, could attract significant interest from major Australian banks, according to an anonymous source.
Sources: Evaluation at Early Stages
Although deliberations have begun, a decision to pursue a sale may not be immediate. HSBC could choose not to divest its Australian consumer banking business.
A representative from HSBC declined to comment, citing the confidentiality of the ongoing evaluation.
Broader Restructuring Effort
This possible divestiture is part of new CEO Georges Elhedery’s sweeping reorganization aimed at simplifying HSBC’s vast operations. Elhedery is streamlining businesses, creating two new regional units: Eastern, covering Asia-Pacific and the Middle East, and Western, encompassing the non-ring-fenced UK, Europe, and the Americas. Hong Kong and the UK will operate separately.
Recent Exit from Non-Performing Operations
HSBC has previously disposed of non-profitable businesses in Canada and, in 2022, acquired a stake in a Chinese company. The sale of its French and US consumer operations, amounting to roughly US$300 million, added to its string of divestitures.
Austalian Consumer Market
HSBC established its operations in Australia in 1965 and secured a commercial license in 1986. As of November, it held A$31.8 billion (approximately S$27 billion) in mortgages, with A$516 million in credit cards and A$538 million in other household loans.
Australia’s consumer banking industry has faced consolidation in recent years. National Australia Bank, for instance, acquired Citigroup’s consumer division in 2022.
Conclusion
As HSBC seeks to streamline its operations, it is exploring the potential sale of its Australian consumer banking business, which could benefit from interest from major local institutions. The possibility of a deal remains uncertain and may depend on various factors.
