CNN — (CNN) — HSBC has agreed to sell its Argentina operations to Grupo Financiero Galicia, the country's largest private financial group, for $550 million, the UK-based bank announced Tuesday. did.
The move comes as part of HSBC's strategic review announced in 2021 as the bank ramps up its expansion into Asia and scales back operations in other regions such as the US and France.
The sale of the Argentine division is “another important step in the execution of our strategy, allowing us to focus our resources on higher value opportunities across our international network,” said Chief Executive Officer ( CEO Noel Quinn said in a statement.
The sale is expected to result in a pre-tax loss of $1 billion for HSBC in the first quarter of this year, the statement added.
“HSBC Argentina is a primarily domestically focused business with limited connectivity to other international networks,” Quinn said, adding that the division “causes significant revenue volatility” to the bank. .
“Galicia is well positioned for business investment and growth,” he said.
Meanwhile, the company's business in China has also taken a hit to its earnings. The bank, Europe's largest by market capitalization, reported a sharp decline in February quarterly profit, due in part to its exposure to China's beleaguered real estate industry.
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