LONDON, April 9 (Reuters) – HSBC (HSBA.L), opens new tab, is selling its business in Argentina and booking a $1 billion loss on the deal, the bank said on Tuesday, as it continues to shrink its once globe-spanning empire to focus on Asia.
HSBC is selling the business, which covers banking, asset management and insurance, to Argentina’s fifth largest bank Grupo Financiero Galicia (GGAL.BA), opens new tab for $550 million, the British bank said.
HSBC CEO Noel Quinn has sought to simplify the sprawling lender to improve performance by exiting several markets in which it has under-performed, including France and Canada.
The sale also fits with the bank’s Asia pivot strategy as it shifts capital, especially to India and China.
HSBC’s shares were flat in early trading in London, while its Hong Kong-listed shares gained 1.1%.
“Argentina has been a problematic market for HSBC in recent years given hyperinflation in the region and a sharp currency devaluation, which has resulted in significant earnings volatility for the business,” said Gary Greenwood, analyst at Shore Capital.
“Exiting Argentina also represents a further step in management’s strategy to simplify the Group and concentrate resources on areas of the business where greater shareholder value can be created,” he said.
Source: REUTER
