HSBC Holdings PLC (LSE:HSBA) is exiting the Argentina market via the US$550 million (£435 million) sale of its subsidiary to Grupo Financiero Galicia.
Galicia is the largest private financial group in Latin America’s second-largest country.
HSBS boss Noel Quinn said: This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network.
“HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network.
“Furthermore, given its size, it also generates substantial earnings volatility for the group when its results are translated into US dollars. Galicia is better placed to invest in and grow the business.”
HSBC expects to take a US$1 billion pre-tax loss on sales “upon reclassification of the business as held for sale in the first quarter of 2024”.
It is not expected to impact HSBC’s CET1 ratio barring an initial 0.1% reduction in the first quarter of 2024.