The London-headquartered bank has appointed Citi to manage the sale of its multibillion-dollar lending business in Australia. This includes approximately $40 billion in loans and $30 billion in deposits. The unit is expected to be on the market within weeks.
HSBC, the largest European bank by assets, has been reviewing its global footprint over recent years. After exiting the US and Canadian markets, it is now refocusing on core regions such as the UK and Asia. Global banks often struggle to achieve meaningful scale in Australia, and HSBC’s retail business in the country appears to no longer align with its long-term strategic goals.
Citi has started preparing marketing materials to attract potential buyers. This follows NAB's $1.2 billion acquisition of Citi’s Australian retail banking unit in 2022, showing that local banks are willing to absorb the assets of global firms. NAB is currently considered the most likely buyer, although ANZ, Westpac or other bidders may still take part.
With three of the four major Australian banks reportedly interested, the final sale price could reach several billion dollars depending on each bidder's appetite and their assessment of HSBC's loan book and deposit base. The sale also highlights a broader industry trend. Banks without adequate scale in Australia are under increasing pressure to exit or consolidate due to rising regulatory demands and shrinking profit margins.
This move follows several recent global exits by HSBC. The bank has abandoned retail banking in the US and Canada, as well as other markets where it lacks a competitive edge. Meanwhile, smaller Australian banks such as AMP Bank and Bank of Queensland are also open to acquisition, indicating that a wave of consolidation may be underway in the sector.
