* HSBC ( HSBC ) to close Australian retail banking business over 18

months

* To focus on corporate, institutional banking in Australia,

NZ

* Deal likely to close in 1H 2027, subject to regulatory

approvals

(Updates throughout with background, details)

July 31 (Reuters) - HSBC ( HSBC ) said on Friday

it would sell its A$36 billion ($25.30 billion) Australian home

and personal loan portfolio to investment giant Blackstone

, marking its phased exit from retail banking in the

country.

The transaction is the latest move in CEO Georges Elhedery's

overhaul of the bank as he seeks to simplify operations, improve

returns and redeploy capital toward higher-growth businesses.

Since assuming the top job in September 2024, Elhedery has

cut management ranks, reduced costs and shed non-core operations

as he reshapes the bank's global footprint.

The bank last week agreed to sell its Singapore insurance

unit to Germany's Allianz SE and in May struck a deal

to divest its retail and wealth operations in Indonesia to

Singapore's Oversea-Chinese Banking Corp.

Since the global financial crisis, HSBC ( HSBC ) has been scaling

back its worldwide footprint, exiting low-returning consumer

banking activities in markets ranging from France and Greece to

Canada.

The Australian portfolio will be acquired by Virgo BidCo, a

vehicle wholly owned by funds managed by Blackstone affiliates,

in a transaction expected to close in the first half of 2027,

subject to regulatory and competition approvals.

Blackstone said separately that it has invested in Australia

for nearly two decades and plans to continue deploying

significant capital to support the country's housing market.

HSBC ( HSBC ) said it would continue investing in its corporate and

institutional banking business across Australia and New Zealand,

moving away from consumer lending as part of the restructuring.

The transaction comes as Australia's housing market faces

softer demand, with higher borrowing costs and tax changes

weighing on investor activity.

Australian lender Westpac said in June mortgage

applications had declined 10% since the government's May budget,

while National Australia Bank ( NAUBF ) on Thursday posted a 15%

drop in applications in the June quarter.

HSBC ( HSBC ) expects the disposal to result in a loss of less than

$100 million by the first half of 2027 and to incur about $300

million in restructuring costs linked to the retail wind-down.

It also expects to recognise about $300 million in foreign

currency translation losses, with no impact on its CET1 ratio.

($1 = 1.4231 Australian dollars)