On Tuesday, HSBC Holdings announced the sale of its Argentina business to Grupo Financiero Galicia, the largest private financial group in the country. The deal is expected to result in a pre-tax loss of $1 billion for HSBC in the first quarter of fiscal 2024.
The sale was made by HSBC Latin America B.V., a unit of HSBC with limited connectivity to the international network of the bank. According to HSBC, the Argentina business is primarily focused on domestic operations and does not have significant connections to their global network. The size of the business also causes earnings to fluctuate dramatically when translated into US dollars.
Grupo Financiero Galicia, based in Buenos Aires, is the fifth largest bank in Argentina. This move is part of HSBC’s strategy to streamline its operations and focus on key markets. The sale will allow HSBC to exit a market where it has limited presence and reduce earnings volatility.
