NAB makes push for HSBC’s deposits

Sources say the deposits are the most appealing part of the ­offering and that NAB is short of deposits. Picture: Getty Images

NAB may have been hamstrung in its efforts to buy the bulk of HSBC’s Australian operation because it was likely to be obstructed by the Australian Competition & Consumer Commission, according to sources.

DataRoom understands that the top four bank put forward a non-conforming bid for HSBC that is understood to have involved it bidding for the bank’s Australian deposits rather than its loans.

Sources say the deposits are the most appealing part of the ­offering and that NAB is short of deposits.

But some believe that even if NAB was eager to buy the loans, it may not have been able to do so because the ACCC would have blocked the acquisition.

The point of contention could be that NAB had already acquired the Citi retail banking business in 2022 for $1.2bn.

DataRoom understands that NAB is the only serious contender for the HSBC offering, which has been up for sale through investment bank Citi.

While JPMorgan is close to NAB, it is not believed to be actively working on any deal.

Of HSBC’s Australian banking operation, 65 per cent involves services to retail customers, including mortgages and credit cards.

Credit funds had made approaches to HSBC to test its interest in selling loan books, but the London-based group had remained keen to sell the business unit, which means any buyer would need a banking licence.

NAB was always thought to be the most likely of Australia’s top four banks to buy the business, as it seeks to gain scale in that part of the market.

Sources suggested that the business had about $40bn of loans and about $30bn of deposits.

Much of its value would depend on the quality of its funding, but market experts believe a sale would be in the billions of dollars.

Consolidated accounts from 2023 lodged with the Australian Securities & Investments Commission shows HSBC Australia Holdings generated $409.8m in profit for 2023, compared to $282.2m in the previous corresponding year.

It had $58.9bn worth of assets, with $34.3bn of personal loans consisting of $33.7bn of mort­gages, $652.6m of credit cards and $3.38bn of corporate and commercial loans.

The potential sale aligns with HSBC’s global strategy of prioritising its home markets of Hong Kong and the UK, while sharpening focus on Asian operations.

Europe’s largest bank by assets has been systematically exiting non-core markets, selling its US retail operations in 2021, followed by a deal to offload Canadian operations to Royal Bank of Canada the following year. The Australian divestment would mark another significant retreat by a global bank from the local market.