HSBC to sell Argentina business to Grupo Financiero Galicia in $550 million deal
HSBC Chairman Mark Tucker told shareholders earlier this month that a much-speculated spin-off of the Asia business will not be happening.
![HSBC to sell Argentina business to Grupo Financiero Galicia in $550 million deal](https://cdn.zeebiz.com/sites/default/files/2024/04/09/287111-screenshot-2024-04-09-112718.png?im=FitAndFill=(1200,900))
HSBC Holdings said on Tuesday it will sell its Argentina business to Grupo Financiero Galicia in a deal valued at $550 million as the lender moves to sharpen focus on its core Asian operations.
HSBC expects to record a $1 billion pre-tax loss related to the deal in the first quarter of fiscal 2024, and the divestment fits in with the bank's current Asia pivot strategy as it shifts capital, especially to India and China.
The bank's shares were up 1.1 per cent. "HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network," the company said. The Argentina business, given its size, generates substantial earnings volatility for the group when its results are translated into U.S. dollars, according to HSBC. Buenos Aires-based Galicia is Argentina's fifth largest bank.
HSBC Chairman Mark Tucker told shareholders earlier this month that a much-speculated spin-off of the Asia business will not be happening. The bank defeated a resolution last year from Hong Kong-based shareholders and backed by major investor Ping An to potentially spin off its lucrative Asia business. The Argentina divestment adds to HSBC's recent list of exits from business activities and different countries in the past few years, including its Canada business, which it sold to the Royal Bank of Canada, and French retail operations.
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