HSBC, the UK-based bank, has agreed to sell its business in Argentina to Grupo Financiero Galicia, the country’s largest private financial group, for $550 million. This move comes as HSBC is focusing more on Asia as part of its strategic review announced in 2021 and has been closing businesses in other regions such as the United States and France.
According to a statement by CEO Noel Quinn, the sale of the Argentina unit “is another significant step in executing our strategy and allows us to focus our resources on higher-value opportunities across our international network.”
The sale is expected to result in a pre-tax loss of $1 billion for HSBC in the first quarter of this year. Quinn explained that HSBC Argentina is primarily a domestic-focused business with limited connectivity to their international network and generates substantial earnings volatility for the bank.
Quinn added that Grupo Financiero Galicia is better positioned to invest and grow the business. Meanwhile, HSBC’s business in China is also impacting its profits. The bank, Europe’s largest by market value, reported a sharp decline in quarterly profit in February due partly to its exposure to China’s troubled real estate sector.
