HSBC has announced the sale of its business in Argentina to Grupo Financiero Galicia, the largest private financial group in the country, for $550 million. This move is part of HSBC’s strategic overhaul that focuses on expanding into Asia and closing down operations in other regions, such as the United States and France. The sale of the Argentina unit is seen as a significant step in executing this strategy, according to CEO Noel Quinn.
Due to the sale, HSBC is expected to incur a $1 billion pre-tax loss in the first quarter of the year. Quinn explained that the Argentina business is primarily focused on the domestic market and has limited connection with the international network, resulting in significant earnings volatility. He believes Grupo Financiero Galicia is better suited to invest in and grow the business.
Apart from the Argentina business, HSBC is also facing challenges in its China operations. The bank reported a significant decline in quarterly profit in February, attributed in part to its exposure to China’s troubled real estate industry. Despite these challenges, HSBC is determined to focus its resources on higher value opportunities across its international network.
