MercoPress. South Atlantic News Agency

HSBC leaving Argentina to pursue other interests

Galicia is better positioned to invest and grow the business, HSBC's CEO said in a statement

Global banking giant HSBC Tuesday announced it was selling its Argentine operations to Grupo Financiero Galicia for US$ 550 million after deciding to leave the South American country to focus on operations in Asia as the new business strategy. The total transfer process could take about 12 months as some regulatory approvals are still needed.

“This transaction is another important step in the execution of our strategy and allows us to focus our resources on higher value opportunities in our international network,” HSBC CEO Noel Quinn said in a statement.

“HSBC Argentina is a primarily domestic-focused business, with limited connectivity to the rest of the international network,” Quinn added.

“Given its size, it also generates significant volatility in the group's results when its earnings are converted into US dollars. Galicia is better positioned to invest and grow the business,” he also pointed out.

HSBC Argentina has over 100 branches throughout the country, 3,100 workers, and around one million customers, which would render Banco Galicia the second-largest in the country behind the state-owned Banco de la Nación Argentina. In 2023, HSBC generated revenues worth US$ 774 million.

In a message to its clients, HSBC said: “Rest assured that we are committed to supporting you and will do everything we can to ensure an orderly transition.”

HSBC last month closed the sale of its Canadian activities to Banque Royale du Canada but will for the time being remain in Mexico and the United States. The bank announced in February that its net profit would increase by more than 56% year-on-year in 2023 driven by high interest rates, but would post a loss in the fourth quarter due to a sharp write-down of a stake in a Chinese bank.