HSBC Holdings said today it will sell its Argentina business and record a $1 billion pre-tax loss from the divestment in the first quarter of fiscal 2024 as the lender moves to sharpen its focus on Asia.
HSBC will sell the business, which covers banking, asset management and insurance and $100m in subordinated debt, to Grupo Financiero Galicia for $550m, according to a statement.
Buenos Aires-based Galicia is Argentina's fifth largest bank.
The divestment fits with the bank's Asia pivot strategy as it shifts capital especially to India and China.
The bank's Hong Kong-listed shares were up 1.1% today.
"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 group chief executive Noel Quinn said in the statement.
"HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network," he said.
The Argentina business, given its size, generates substantial earnings volatility for the group when its results are translated into US dollars, according to HSBC.
HSBC Chairman Mark Tucker told shareholders earlier this month that a much speculated spin-off of the Asia business will not be happening.
The bank defeated a resolution last year from Hong Kong-based shareholders and backed by major investor Ping An to potentially spin-off its lucrative Asia business.
The Argentina divestment adds to HSBC's recent list of exits from some business activities and different countries in the past few years, including its Canada business, which it sold to the Royal Bank of Canada and its French retail operations.
