We are pleased to announce the sale of our banking operations in Argentina to Grupo Financiero Galicia, the largest private financial group in Argentina. The deal is valued at US$550m and is expected to be finalized within the next 12 months.
As a result of this deal, we will recognize a US$1.0bn pre-tax loss on disposal in the first quarter of 2024. However, there will be minimal impact on the Group’s common equity tier 1 (CET1) ratio at closing. Additionally, about US$4.9bn of historical cumulative foreign currency translation reserve losses will be acknowledged in the income statement at closing. These losses have already been accounted for in capital and will not affect the CET1 or tangible net asset value. The transaction will be considered a notable item and will be excluded from the dividend payout calculation.
Our Chief Executive, Noel Quinn, expressed his satisfaction with the sale of HSBC Argentina, stating that it is a crucial step in the implementation of our strategy. It will allow us to focus our resources on more valuable opportunities within our international network. HSBC Argentina is primarily a local business with limited connections to our global network. Given its size, it also leads to substantial earnings fluctuations for the Group when converted into US dollars. Grupo Financiero Galicia is better positioned to invest in and expand the business.
We remain committed to our operations in Mexico and the US, as well as serving our international clients across our global network with our exceptional transaction banking capabilities
