HSBC to sell Argentinian banking arm to Grupo Financiero Galicia for $550m
Global banking heavyweight HSBC has entered into an agreement to sell its banking operations in Argentina to Grupo Financiero Galicia for $550 million.
HSBC sells Argentinian banking operations in $550m deal
The deal, which is expected to be finalised within the next 12 months, will see Galicia acquire all aspects of HSBC Argentina’s operations, including asset management, insurance, and banking. Furthermore, Galicia will take on $100 million of subordinated debt issued by HSBC Argentina and held by other HSBC entities.
HSBC states that the sale will result in a pre-tax loss of $1 billion, to be reflected in Q1 of 2024.
Based in Buenos Aires, Grupo Financiero Galicia is a financial services holding company. Through its subsidiaries, including Banco Galicia, it provides services including savings, credit, and insurance, among others.
Speaking on the deal, HSBC’s chief executive Noel Quinn says: “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.
“HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network. 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.”
Quinn concludes by emphasising that the banking group remains “committed to Mexico and the US, and to serving our international clients throughout our global network”.
The news comes just a few months after HSBC Continental Europe (HBCE) announced that it has completed the sale of its retail banking business in France to Crédit Commercial de France (CCF), a subsidiary of My Money Group.
The bank has been looking to expand its operations in Asia and agreed to buy Citi’s retail wealth management portfolio in China in October last year.
