Global bank HSBC has agreed to sell its Argentina division to financial services company Grupo Financiero Galicia for US$550 million as it focuses on core Asia operations.
The final price is subject to some price adjustments, read a statement. The deal includes all of HSBC Argentina’s business, which ranges from banking to asset management and insurance, as well as US$100 million of subordinated debt.
The London-listed lender expects to take a US$1-billion pre-tax loss on the disposal in the first quarter, while the price is subject to adjustments depending on the performance of the business before the deal closes, it added.
Argentina’s economy is plagued by triple-digit annual inflation that stands at over 200 percent, and a highly volatile peso currency.
hSBC added that, following the deal’s close, it would write off US$4.9 billion in historical foreign exchange losses, partly linked to the sharp devaluation of the peso announced late last year by President Javier Milei.
The Argentina unit has a network of more than 100 branches and employs 3,100 people. It has around one million customers and generated revenues last year totalling US$774 million. It made a profit before tax of US$239 million in 2023.
The impact of the transaction will be excluded from HSBC’s dividend payout calculation, which remains at 50 percent for 2024. It is expected to complete within the next 12 months.
Quinn said HSBC remained committed to its business in Mexico and the United States, and to serving international clients across its global network.
The move is part of HSBC’s strategy to simplify and refocus operations on its major region of Asia.
The Argentina disposal is expected to be completed during the next 12 months, and remains subject to conditions including regulatory approvals.
SOURCE: www.batimes.com.ar