- With this purchase, Grupo Financiero Galicia, a domestic financial group, will become the second-largest bank in the country
HSBC, the ninth largest bank in the country, announced the sale of its Argentine subsidiary to Grupo Financiero Galicia for a total of $550 million. The British bank’s decision is part of a global strategy to focus on its operations in Asia.
The sale includes all of HSBC’s local businesses, such as the bank, Asset Management, and the Insurance companies. The transition process could take up to 12 months and is subject to regulatory approval. HSBC Argentina has over 100 branches and 3,100 employees. It has reached one million customers. In 2023, it reported pre-tax profits of $239 million.
With this purchase, Galicia will become the second largest bank in the country, behind only Banco Nación. The sum of its assets would reach 7.928 trillion pesos, compared to the 6.119 trillion managed by Banco Provincia.
The decision by HSBC, which is the eighth largest bank in the world, comes at a time of low profitability for the Argentine banking sector. The high-interest rates paid by the Treasury on its peso debt issuances boosted results in 2023, but the drop in rates and the setting of a floor for term deposits have made the lending business less attractive.
Other foreign banks that have recently left the Argentine market are Itaú (Brazil) and Santander (Spain). In this scenario, domestic banks are taking advantage of the opportunity to expand their market share.
The sale of HSBC to Galicia is another sign of the reconfiguration of the Argentine banking sector. It remains to be seen how this operation will impact the country’s financial landscape.
The move boosted the shares of Grupo Financiero Galicia, which became the star of the round in early trading. The ADR of the main private bank in our country rose 3.5%, to USD 28.69 on Wall Street, its highest price since July, 2019.
