In a major move to streamline its operations and focus on more profitable ventures, HSBC Holdings has announced the sale of its Argentina business to Grupo Financiero Galicia. The transaction is expected to generate a pre-tax loss of $1 billion in the first quarter of fiscal 2024 for HSBC.
According to HSBC, the sale will be facilitated by its unit, HSBC Latin America B.V., signing a deal with Galicia. The company said that HSBC Argentina primarily focuses on domestic operations and has limited connectivity to the international network. This separation of the Argentina business from the rest of the HSBC operations will help reduce earnings volatility for the group, especially when translated into US dollars.
HSBC anticipates a pre-tax loss of $1 billion from the divestment in the first quarter of fiscal 2024. However, this move is expected to help streamline HSBC’s operations and focus on more profitable ventures.
Grupo Financiero Galicia, which is based in Buenos Aires, is the fifth largest bank in Argentina. The acquisition of HSBC’s Argentina business will expand Galicia’s footprint in the country’s financial sector. This move will also provide an opportunity for Galicia to leverage its expertise and resources to grow its business in South America.
