Pepper Money to act as loan management partner as FBAA urges brokers to reach out to affected customers
US private credit giant Blackstone is officially purchasing HSBC's $36 billion Australian loan book, MPA can confirm. The deal was subject to speculation in recent weeks.
It is by far the largest private credit takeover of an Australian mortgage book, and follows Westpac's $21.4 billion sale of the RAMS portfolio to a consortium including Blackstone rival KKR and Pepper Money.
The remainder of HSBC Australia's retail business not covered by the sale will be wound down in a phased manner over the next 18 months. HSBC said customers can continue banking as normal for now and will be given further detail on changes to their products, with no action required from them at this stage.
The decision follows a strategic review of HSBC's Australian retail business and part of the broader simplification of the HSBC Group.
"Australia remains an important part of HSBC's global network," said the bank. "HSBC will continue to invest in and grow its Corporate and Institutional Banking franchise across Australia and New Zealand to support corporates, institutions, superannuation funds and innovative scale-ups with pursuing their domestic and offshore growth ambitions. HSBC will also continue to invest in and grow its Asset Management and Private Banking businesses, which will continue to operate in Australia."
Dan Leiter, head of international for Blackstone Credit & Insurance, said: "International expansion is a major priority for our private credit business. Blackstone's global credit platform, deep origination capabilities, and long-standing relationships position us to deliver unique value to clients around the world. This marquee investment is a testament to the power of our franchise and our conviction in the growing opportunities in credit across Asia."
Mike Culhane, head of international business development for asset based finance, Blackstone Credit & Insurance, said: "We are pleased to invest in a high-quality Australian home loan portfolio while supporting a seamless transition for HSBC customers and helping them maintain competitively priced loans. With Pepper Money providing experienced local loan management, customers can continue to receive high standards of service. We strive to oversee this portfolio thoughtfully and with discipline and remain committed to Australia as a highly attractive market for long-term credit investment."
Why customer protections don't change
The change in ownership doesn't alter the rules protecting HSBC's borrowers. Obligations under the National Consumer Credit Protection Act, and the requirement to hold an Australian Credit Licence, attach to whoever is actually engaging with the customer – not to whoever owns the loan on paper. That's why a licensed loan manager has to be appointed whenever a fund with no consumer-facing operations buys a book like this.
Pepper Money will serve as the portfolio's loan management partner. Mario Rehayem, chief executive of Pepper Money, said: "Pepper Money's appointment as the loan manager reflects the strength of our established platform and our experience supporting customers across large, complex portfolios.
"For more than 26 years, we have both originated and serviced loans on behalf of third parties. With the scale, systems, and focus on customer care, we are well placed to provide a positive customer and partner experience through transition. Alongside Blackstone and HSBC, our focus will be on disciplined execution, continuity for customers, and clear, genuinely helpful support at every step."
The disposal is expected to generate an immaterial loss for the HSBC Group, with further detail set out in HSBC Group's stock exchange announcement. The sale is expected to complete in the first half of 2027, subject to regulatory approval.
Blackstone is the world's largest alternative asset manager, with more than US$1.3 trillion in assets under management spanning real estate, private equity, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds.
What it means for brokers
Leo Gagic, chief executive of the Finance Brokers Association of Australia, recognised the announcement and expressed his confidence in Pepper Money's running of the book.
"I encourage brokers to be on the front foot and notify affected customers," said Gagic. "Announcements or changes, even at times where there may be no significant impact, are opportunities for brokers to connect with customers, show that they care, and discuss their current circumstances. It is this level of customer service that builds ongoing trust, which is the foundation of the broker customer relationship."
