Argentine President Javier Miley is battling to bring inflation under control after it soared to 140 percent last year. Photo: Agustin Markarian
HSBC unloads its Argentina business, suffering losses of $1bn (£790m) as Javier Miley, the country's new “anarcho-capitalist” president, fights to curb hyperinflation.
The bank will sell HSBC Argentina to Grupo Financiero Galicia, the country's largest private lender.
HSBC, which is selling the unit for $550 million, will take a $1 billion loss and record about $5. billion in historical losses after the deal closes, which is expected over the next 12 months.
HSBC Argentina has 100 branches and 3,100 employees.
The bank said its Argentine unit has started operations. create instability in financial results.
In February, the company filed a $500 million charge over hyperinflation in Argentina after converting HSBC Argentina's earnings from pesos to U.S. dollars.
Since taking office in December, President Miley has devalued the peso by 54% amid Argentina's economic crisis. country.
The president has also fought to get inflation under control after it soared to 140% last year.
Noel Quinn, chief executive of HSBC, said the bank's Argentina unit was creating “significant earnings volatility.” for the group Photo: Lam Yik
President Miley is a libertarian and self-proclaimed anarcho-capitalist who praises Donald Trump.
During the campaign, the former TV host campaigned holding a chainsaw above his head as a symbol of his downsizing plans. – costs.
Noel Quinn, chief executive of HSBC, said the exit from Argentina would allow the bank to focus on better opportunities in its empire.
He said: “HSBC Argentina is primarily a domestically focused business, with limited links to the rest of our international network.”
“In addition, given its size, it also creates significant earnings volatility for Group when its results are converted to US dollars. Galicia is in a prime position for investment and business development.
“We remain committed to Mexico and the US and serve our international clients across our global network with our leading transaction banking capabilities.”
Gary Greenwood, an analyst at Shore Capital, said: “Argentina has been a challenging market for HSBC in recent years due to hyperinflation in the region and sharp currency devaluations, which have led to significant volatility in business earnings.< /p>
“Although There is significant accounting noise associated with this disposal and we do not expect it to have a material impact on the stock's valuation or investment case.”
HSBC has cut costs in several countries this year, selling both its Canadian and and French retail business.
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