The amount of the transaction amounts to US$550 million and will imply a charge of US$1,000 million in the accounts of the HSBC group in the first quarter of 2024.

This Tuesday, through a statement, the global banking giant HSBC announced the sale of its business in Argentina to Grupo Financiero Galicia, the fifth largest bank in Argentina, for US$550 million along with US$100 million of subordinated debt. issued by HSBC Bank Argentina.

"This transaction is another important step in the execution of our strategy and allows us to focus our resources on higher value opportunities across our international network," HSBC CEO Noel Quinn said in the statement.

Likewise, HSBC reported that the operation will imply a charge of US$ 1,000 million in the group's accounts in the first quarter of 2024.

Meanwhile, after the announcement, Grupo Financiero Galicia rose almost 7% on the stock market in the early stages of the trading session. Specifically, the shares of the Argentine entity have risen to US$29.62, 6.83% more in value than the previous day.

HSBC Chief Executive Noel Quinn has sought to streamline the expanding lender to improve its performance by exiting several markets where it has underperformed, including France and Canada.

The sale also fits with the bank's pivot strategy in Asia as it shifts capital, especially to India and China.

HSBC 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 due to hyperinflation in the region and a sharp currency devaluation, which has resulted in significant earnings volatility for the business," said Gary Greenwood, an analyst at HSBC. Shore Capital.

"Leaving Argentina also represents another step in management's strategy to simplify the Group and concentrate resources in areas of the business where greater value can be created for shareholders," he added.

In addition to posting a loss in the first quarter, HSBC said the deal would lead it to recognize $4.9 billion in historical currency translation reserve losses when the sale closes.

Losses increased by US$1.8 billion last year as a result of the devaluation of the Argentine peso, the bank reported.

HSBC said those losses had already been recognized in its capital levels and would have no impact on its core capital or asset value levels.

"This transaction is another important step in the execution of our strategy and allows us to focus our resources on higher value opportunities across our international network," Quinn said in a statement.

"HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network," he said.

The Argentine business, given its size, creates substantial volatility in the group's profits when its results are translated into US dollars, according to HSBC.

HSBC has faced shareholder scrutiny in recent years over its geographic spread and overall strategy.

Last year, the bank rejected a resolution by Hong Kong-based shareholders, backed by major Chinese investor Ping An, to potentially spin off its Asian unit to try to fully realize the value of its most lucrative business.

HSBC said it remained committed to the United States, where it exited retail banking in 2021, and to Mexico, a question mark for the bank since it paid $2 billion in 2012 to U.S. regulators over lax money laundering controls.