Why HSBC Is Walking Away From Australian Retail Banking After 40 Years

HSBC’s withdrawal highlights the scale required to challenge Australia’s dominant banks, according to finance expert Shane Shmuel.

The HSBC bank logo is seen on a branch bank in the financial district of New York City on Aug. 7, 2019. Brendan McDermid/Reuters

After more than six decades in Australia, HSBC has officially abandoned its retail banking ambitions.

Founded in Hong Kong in 1865, HSBC first established operations in Australia in 1965 and was awarded a local commercial banking licence in 1986.

Yet according to finance expert Shane Shmuel, the bank was never able to secure enough market share against the Big Four incumbents.

“HSBC never achieved sufficient market share to compete effectively, holding only around 1 to 1.5 percent of the retail banking market,” Shmuel told The Epoch Times.

“As a result, it lacked the scale needed to spread its technology, compliance, and operating costs efficiently,” he said.

“It reinforces the challenge for smaller and foreign banks to achieve the economies of scale necessary to compete effectively in Australia’s concentrated retail banking market.”

The global banking group announced on July 31, that it would close its Australian retail banking business over the next 18 months, selling its approximately $36 billion (US$25 billion) Australian home and personal loan portfolio to Blackstone.

It has stopped accepting applications for new consumer products, while its 19 branches will progressively close.

It will retain its corporate and institutional banking, private banking, and asset management operations.

Shmuel said HSBC’s small share of Australian mortgages meant the withdrawal was unlikely to materially affect borrowing costs or competition for customers with a range of options available for customers.

HSBC’s Consolidation

Australia’s mortgage market is dominated by the Commonwealth Bank, Westpac, National Australia Bank (NAB), and ANZ, collectively referred to as the “Big Four” banks.

For HSBC, the Australian withdrawal forms part of a wider effort under Group CEO Georges Elhedery to concentrate investment in businesses and markets where the brand has a clear competitive advantage (pdf).

Shmuel said while HSBC’s retreat highlighted the challenges with the Australian market, he argued success was not out of reach.

He pointed to the investment-focused Macquarie Bank’s foray into the retail sector as an example, saying its sustained investment, digital services, competitive savings products, and close relationship with mortgage brokers had helped it carve out a solid position in the market.

In its yearly operational briefing, Macquarie says 95 percent of its home loans originate through brokers, allowing it to reach borrowers nationally without maintaining an extensive branch network.

As of December 2025, it currently holds 6.8 percent of Australia’s home-loan market.

“Macquarie Bank demonstrates that success is possible, but only with sustained investment and a clear retail banking strategy,” Shmuel said.

HSBC’s decision follows the American Citigroup’s withdrawal from Australia’s consumer banking scene with the group selling its retail business to NAB in 2021.