HSBC will take a $1bn hit after inking a deal to sell its business in Argentina.
The banking giant has agreed to sell the division to Grupo Financiero Galicio, the country’s largest private financial group, for $550m.
The deal includes banking, asset management and insurance, as well as $100m of subordinated debt.
HSBC said the move will allow it to focus on higher-value opportunities. It will book the pre-tax loss in the first quarter of this year.
Noel Quinn, HSBC chief executive, said:
We are pleased to agree the sale of HSBC Argentina. 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.