Agustin Markarian/Reuters/File
Pedestrians walk past a closed HSBC branch during the national strike in Buenos Aires, Argentina.
New Delhi
CNN
—
HSBC has agreed to sell its Argentina operations to Grupo Financiero Galicia, the country's largest private financial group, for $550 million, the UK-based bank announced on Tuesday.
The move comes as Europe's largest bank by market capitalization further expands into Asia as part of a strategic review announced in 2021, and as it scales back operations in other regions such as the US and France. It was held in
“HSBC Argentina is a primarily domestically focused business with limited connectivity to the rest of our international network,” Chief Executive Noel Quinn said in a statement, adding that the division has given the bank “significant revenue growth.” “It's causing a lot of fluctuation,” he added.
Analysts say HSBC's decision to exit a hyperinflationary economy was driven by the Bank's continued efforts to streamline its operations;
“This sale is consistent with HSBC's pattern of exiting struggling markets such as France and Canada,” said Will Howlett, a financial analyst at Quilter Cheviot.
HSBC's Mr Quinn said the deal was “another important step” in shifting the bank's focus to “higher value opportunities across our international network”.
The sale is expected to result in a pre-tax loss of $1 billion for HSBC in the first quarter of this year, the bank said. Added.
Sophie Land-Yates, principal equity analyst at Hargreaves Lansdown, said the financial hit was “short-term” and “offset by the reassurance that the group's rationalization plans are on track. ” he said.
Meanwhile, HSBC's China operations have also taken a hit to profits. The bank saw its quarterly profit decline sharply in February, due in part to its exposure to China's troubled real estate industry.
