HSBC has agreed to sell its business in Argentina to Grupo Financiero Galicia, the largest private financial group in the country, for $550 million, the UK-based bank said on Tuesday. The move comes at a time when the bank is pushing harder into Asia, as part of a strategic overhaul HSBC unveiled in 2021, and has wound down businesses in other regions, including the United States and France.
The sale of the Argentina unit “is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network,” CEO Noel Quinn said in a statement.
The sale is expected to lead to a $1 billion pre-tax loss for HSBC in the first quarter of this year, the statement added.
“HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network,” Quinn said, adding that the unit “generates substantial earnings volatility” for the bank.
“Galicia is better placed to invest in and grow the business,” he said.
Meanwhile, its China business is also hurting its earnings. The bank, Europe’s biggest by market value, reported a big drop in quarterly profit in February, partly because of its exposure to China’s troubled real estate industry.
