HSBC: Argentine subsidiary sold to Galicia Group

(CercleFinance.com) - On Tuesday HSBC announced the sale of its Argentine subsidiary to Galicia Group for $550m, continuing its strategy of withdrawing from markets considered less profitable.


HSBC Argentina - which offers banking, insurance and asset management services - has a network of around 100 branches and employs about 3,100 people.

The entity also boasts around one million customers.

Noel Quinn, the financial giant's Chief Executive Officer, explains that this operation is part of the Group's drive to focus on countries offering the greatest opportunities.

He added that HSBC Argentina was largely a domestic business, with few links to other international activities, and that its results, when converted into dollars, were often synonymous with great volatility in the bank's consolidated accounts.

HSBC pointed out that its subsidiary had accumulated foreign exchange losses of around $4.9bn over the years, due in particular to the devaluation of the Argentine peso last year, and that this amount was already included in its CET1 solvency ratio.

The operation, which should be comleted within the next 12 months after obtaining the necessary authorizations, should nevertheless result in a pre-tax loss of around $1bn.

Even so, London listed HSBC shares were little changed (+0.3%) in the wake of this announcement.


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