Faced with a possible sale of HSBC’s Argentine branch to Banco Galicia, the foreign bank’s local CEO informed his employees of the current situation.
The note signed by Giovanni Parmaaddressed to his team, and to which he had access Clarion verbatim it says the following
“You will surely have read a story today in the media (referring to the newspaper La Nación) about our local operation and, as always, I will speak to you honestly. We have been contacted by people interested in our operation in Argentina and, for the moment, no agreement has been reached. We continue to operate as usual, focusing on providing the best service to our customers. My commitment to you is to keep you informed and this will be the case if there is any news.”
In reading the bankers consulted by Clarionthe “for the moment” is an unmistakable signal that the process is more than advanced.
Today HSBC is the seventh private bank of the system by assets and eighth by deposits, with a market share of 3.3% and 3.2% respectively in January 2023
For at least five years there have been rumors of the possibility that HSBC will abandon its activities in Argentina, the only country in the region in which it is present.
¿What happened now, at the very beginning of a new government with a radically different economic approach from the previous one, an approach vehemently supported by the former CEO of HSBC, Gabriele Martino?
On the one hand, the weight of Argentina’s HSBC in the bank’s overall package is negligible. Maybe they see better opportunities elsewhere. But an objective fact also happened: in 2023, the sale of the Brazilian’s local business was completed. Itaú banked at Macro, for a sum that would have sounded ridiculous a few years ago: just 50 million dollars.
This was important for those who look at the value of companies because over time a certain price appeared on the market.
Financial market observers believe that if the Galizia-HSBC deal is closed, it will be closed once again at a very low price
Reasons: There is someone who wants to leave, and in that desire the price must be lowered. But Galicia must also realize that the price it could get is so low that it would ignore, for example, the fact that there is a strong overlap of branches in the city of Buenos Aires and the metropolitan area of Buenos Aires. The natural thing in these cases would be to eliminate these overlaps, which would result in a strong staff adaptation.
It should be remembered that, despite the digitalisation of the financial system, the sector has reduced its staff very little. We see the hand of trade unionist Sergio Palazzo, leader of La Bancario.
Again, if the price is very attractive, Galicia could support this alleged excess of branches and staff.
Another fact that makes bankers doubt. The Galician group reported a profit of 580 billion dollars in its latest balance sheet and proposed to distribute dividends of 330 billion dollars. “If the deal was close to completion, they wouldn’t give out such a large sum.”
Source: Clarin
