Trending: HSBC's Argentina Exit Comes With $1 Billion Hit

1012 GMT - HSBC is among the most-mentioned companies across news items over the past 12 hours, according to Factiva data. The British lender is selling its business in Argentina to Grupo Financiero Galicia--the country's largest private financial group--for $550 million dollars as it continues to exit markets that are no longer core to its strategy in order to focus on its activities in Asia. HSBC is taking a $1 billion loss in its first-quarter accounts as a result and will recognize $4.9 billion in historical cumulative foreign-currency translation reserve losses when the deal closes. "While there is significant accounting 'noise' associated with this disposal, we do not expect it to have a material impact on the valuation of the stock or the investment case", analyst Shore Capital Gary Greenwood says. The Argentine market had long been a problematic one for the bank given hyperinflation and a sharp currency devaluation which heightened earnings volatility. "The domestic focus of the Argentine division offered limited synergies with HSBC's global operations, making the disposal a logical step in its global strategy," Quilter Cheviot analyst Will Howlett writes. The move follows the recent disposal of its France and Canada businesses. Shares in London edge up 0.5% to 648 pence. Dow Jones & Co. owns Factiva. (elena.vardon@wsj.com)

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April 09, 2024 06:27 ET (10:27 GMT)

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