HSBC is exploring the sale of its retail bank in Australia, aiming to streamline its global operations, reported The Australian Financial Review, citing sources.
The potential sale, managed by Citi, could attract local lenders seeking to expand their credit card offerings.
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HSBC’s Australian retail bank provides credit cards, mortgages, and savings accounts.
While HSBC and Citi have not commented, market sources indicate the bank’s focus on retaining its commercial banking operations in Australia.
HSBC has operated in Australia since 1986, holding a banking licence since former treasurer Paul Keating opened the market to foreign competition.
Despite having A$23bn (~$15bn) in owner-occupier mortgages and A$10bn in investor loans by May, HSBC has struggled to compete with local banks.
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By GlobalDataThe bank’s A$486m in credit card debt surpasses that of Bendigo and Adelaide Bank and Macquarie. Additionally, HSBC holds A$18bn in household deposits, appealing to migrants from Asia and wealthy travellers through its multi-currency accounts.
A prospective buyer must convince the Australian Competition and Consumer Commission (ACCC) that the acquisition will not significantly reduce competition.
In 2021, the ACCC approved National Australia Bank’s A$1.2bn acquisition of Citi’s retail bank in Australia.
ANZ’s new chief executive, Nuno Matos, who previously led HSBC’s retail bank in the UK and Europe, is familiar with HSBC’s operations.
However, Matos is currently focused on integrating Suncorp Bank, which ANZ acquired last year.
In October, HSBC chief executive Georges Elhedery announced plans to streamline the bank’s geographic governance structures, reducing them from five regions to two.
HSBC is also introducing four new business lines: Hong Kong, the UK, corporate and institutional banking, and international wealth and premier banking.
In February, HSBC set a goal to save A$461m in 2025 and reduce its annual cost base by A$1.5bn by the end of next year.
The bank is also closing key parts of its investment banking operations in Europe and the Americas.
Earlier this week, Brazilian bank BTG Pactual signed a deal to buy HSBC’s operations in Uruguay for $175m.
