LONDON (AFP/APP): Global bank HSBC has agreed to sell its Argentina division to the financial services company Grupo Financiero Galicia for $550 million as it focuses on core Asia operations, it said Tuesday.
“This transaction 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,” chief executive Noel Quinn said in a statement.
The London-listed lender expects to take a $1.0 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.
“HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network,” Quinn said.
“Furthermore, given its size, it also generates substantial earnings volatility for the group when its results are translated into US dollars.
“Galicia is better placed to invest in and grow the business.” Argentina’s economy is plagued by triple-digit annual inflation that stands at over 200 percent, and a highly volatile peso currency.
