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HSBC to sell Argentina business for $550M

Animated illustration of the sun from Argentina's flag looking upset.

Illustration: Shoshana Gordon/Axios

HSBC Holdings announced Tuesday it will sell its business in Argentina to Grupo Financiero Galicia for $550 million.

Why it matters: HSBC has been exiting underperforming markets to refocus on more profitable regions.

Catch up quick: Earlier this year, HSBC completed the sale of its Canada business to Royal Bank of Canada and divested its French retail banking business to Crédit Commercial de France (CCF).

  • It had previously announced plans to sell off units in Greece and Russia.
  • Last year, CFO Georges Elhedery told Reuters that the bank could sell or streamline businesses in 12 countries.

By the numbers: The U.K.-based lender will take a $1 billion hit to pre-tax earnings in the first quarter to divest its Argentina operations.

  • It will also recognize $4.9 billion in historical losses related to the falling value of the peso when the deal closes, which is expected in the next 12 months.

Between the lines: Despite its recent run of divestments, HSBC Group CEO Noel Quinn reasserted the bank's commitment to operations in the U.S. and Mexico.

What they're saying: "HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network," Quinn said in a statement.

  • "Furthermore, given its size, it also generates substantial earnings volatility for the Group when its results are translated into U.S. dollars. Galicia is better placed to invest in and grow the business."
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