(CercleFinance.com) – HSBC announced on Tuesday the sale of its Argentine subsidiary to the Galicia group for an amount of $550 million, thus continuing its strategy of withdrawal from markets considered to be the least profitable.
HSBC Argentina – which offers banking, insurance and asset management services – has a network of around 100 branches which employ some 3,100 people.
The entity also claims around one million customers.
Noel Quinn, the managing director of the financial giant, explains that this operation is part of the group’s desire to focus on countries with the most opportunities.
He adds that HSBC Argentina was an entity largely focused on the domestic economy, with few links to other international activities, and that its results, once converted into dollars, were often synonymous with great volatility for the bank’s consolidated accounts.
HSBC argues that its subsidiary had accumulated, over the years, currency losses of around $4.9 billion, notably due to the devaluation of the Argentine peso last year, while specifying that this amount was already included in its ‘CET1’ solvency ratio.
The operation, which should be finalized within the next 12 months after obtaining the necessary authorizations, should nevertheless result in a pre-tax loss of around one billion dollars.
On the London Stock Exchange, HSBC shares moved without much change (+0.3%) in the wake of this announcement.
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