With the purchase of HSBC’s assets in Argentina, Banco Galicia consolidates itself as the country’s leading private bank. It paid $550 million to add nearly 3.5 points to HSBC’s market share and jump to 13 points, below only Banco Nación and above Macro and Santander. Together with the assets and liabilities they will absorb 3 thousand employees and just over 100 branches. “
The general director of Galicia, Fabian Kon, told Clarín that the operation represents a strong bet by the bank on a vertical recovery in credit demand from the private sector. In his opinion, “if the macroeconomic situation stabilizes and the decline in inflation consolidates, banks will be able to double the volume of loans year after year.”
–What did they see to pay HSBC $550 million?
— We have chosen a bank with excellent management quality, a service appreciated by its customers and a potential for profitability and growth. We have acquired a good base of corporate clients, corporates, SMEs, individuals and investors who complement our portfolio very well. Furthermore, expanding the customer base is very important to increase the profitability of banks which are now technology companies.
–They incorporate more than 100 branches, some overlapping those in Galicia, and more than 3,000 employees. How will you handle this problem?
— All employees will be retained and we will see what to do with the branches. There are places where loan officers are essential to having a good relationship with customers and we will maintain that. As far as people are concerned, I repeat, there will be no redundancy fund and at most we will study a voluntary retirement plan. But this is missing, because the Central Bank has yet to approve the operation.
— How was the price defined?
— We pay a value that represents, in our opinion, the profitability potential that we see, I repeat, because of the explosion of private sector credit that we have in our projections. Today the Argentine financial system is insignificant compared to the country’s GDP and compared to that of other countries.
— The latest sales reference on the financial market was the purchase of Itaú by Macro. It was made for 50 million less than a year ago.
Yes. It was a much smaller bank and the political and economic moment was different. Since then, bank stocks have risen sharply and country risk has declined. And this is reflected in the price of financial assets.
Source: Clarin
