HSBC has reached an agreement to sell its banking operations in Argentina to Grupo Financiero Galicia. The deal, valued at USD 550 million, is subject to certain price adjustments and is anticipated to be finalised within the next 12 months.

Key points resulting from the transaction include: A pre-tax loss of USD 1 billion on disposal is expected to be recognised in the first quarter of 2024.  The impact on the Group's common equity tier 1 (CET1) ratio upon closing is projected to be insignificant.  Upon closing, approximately USD 4.9 billion of historical cumulative foreign currency translation reserve losses will be acknowledged in the income statement. These losses have already been recognised in capital and will not affect CET1 or tangible net asset value.  The transaction will be classified as a material notable item and excluded from the dividend payout calculation. HSBC officials commented on the sale, stating that it represents a significant step in executing the company's strategy, allowing them to concentrate resources on higher-value opportunities within their international network.

They also noted that HSBC Argentina primarily operates within the domestic market and possesses limited connectivity to the broader international network. Additionally, the business's size contributes to substantial earnings volatility for the Group when results are translated into US dollars. HSBC representatives further emphasised HSBC's commitment to Mexico and the United States, as well as their dedication to serving international clients across their global network with leading transaction banking capabilities.

Other notable developments from HSBC In March 2024, HSBC launched its Venture Debt offering in Singapore and a USD 1 billion investment in the ASEAN Growth Fund to scale up digital platform businesses in the region. Following this announcement, the USD 150 million Venture Debt offering in Singapore and the USD 1 billion ASEAN Growth Fund were aimed at the process of scaling high-growth companies, firms, and digital platform businesses respectively. Moreover, the high-growth companies in the region of Singapore that were backed by venture capital or private equity investors received the possibility to access HBCS’s Venture Debt capability in order to benefit from flexible funding arrangements and accelerate their development.

At the same time, the new Venture Debt offering was designed in order to provide a longer-term and flexible financial service to firms and companies. This process is expected to support the range of funding requirements such as capital expenditure, working capital, and runway extension for up to three years in tenor. .