HSBC sells Argentina banking operations with $1b loss

Grupo Financiero Galicia will be paying $550m for the unit.

HSBC has agreed to sell its banking operations in Argentina to Grupo Financiero Galicia and will be booking a $1b pre-tax loss on the deal.

The deal, worth $550m, is expected to be completed in the next 12 months.

Despite the loss, HSBC group chief executive Noel Quinn expressed his satisfaction on the sale, saying that the divestment is “an important step” in execution of its strategy to pursue higher value opportunities across the bank’s international network.

Quinn said that HSBC Argentina is “a domestically focused business, with limited connectivity to the rest of our international network.”

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“Furthermore, given its size, it also generates substantial earnings volatility for the group when its results are translated into US dollars,” Quinn noted, adding that Galicia– Argentina’s largest private financial group– is better placed to invest in and grow the business.

“We remain committed to Mexico and the US, and to serving our international clients throughout our global network with our leading transaction banking capabilities,” Quinn said.