“HSBC takes $1 bln hit from Argentina sale as Asia pivot continues…”

Global bank HSBC has agreed to sell its Argentina division to the financial services company Grupo Financiero Galicia for $550 million (€501m) as it focuses on core Asia operations.

HSBC is selling the business, which covers banking, asset management and insurance, to Argentina’s fifth largest bank Grupo Financiero Galicia for $550 million, the British bank said.

HSBC CEO Noel Quinn has sought to simplify the sprawling lender to improve performance by exiting several markets in which it has under-performed, including France and Canada.

The sale also fits with the bank’s Asia pivot strategy as it shifts capital, especially to India and China.

HSBC’s shares were flat in early trading in London, while its Hong Kong-listed shares gained 1.1%.

“Argentina has been a problematic market for HSBC in recent years given hyperinflation in the region and a sharp currency devaluation, which has resulted in significant earnings volatility for the business,” said Gary Greenwood, analyst at Shore Capital.

“Exiting Argentina also represents a further step in management’s strategy to simplify the Group and concentrate resources on areas of the business where greater shareholder value can be created,” he said.

As well as booking a loss in the first quarter, HSBC said the deal would lead it to recognise $4.9 billion in historical currency translation reserve losses when the sale closes.

The losses grew by $1.8 billion last year as a result of the devaluation of the Argentinian peso, the bank said.

HSBC said those losses had already been recognised in its capital levels and would have no impact on its core capital or asset value levels.

“This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network,” Quinn said in a statement.

“HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network,” he said.

The Argentina business, given its size, creates substantial earnings volatility for the group when its results are translated into U.S. dollars, according to HSBC.

HSBC has faced shareholder scrutiny in recent years over its geographic spread and overall strategy.

The bank defeated a resolution last year from Hong Kong-based shareholders, and backed by major Chinese investor Ping An, to potentially spin-off its Asia unit to try to fully realise the value of its most lucrative business.

The bank said it remained committed to the United States, where it exited retail banking in 2021, and to Mexico, a question mark for the bank ever since it paid $2 billion in 2012 to U.S. regulators over lax money laundering controls.

Croatians prepare for early election amid political turmoil

A vote on 17 April will be the first step of Croatia’s “super election year,” involving European elections in June and the presidential vote in December.

Croatians are preparing to go to the polls next weekend for an early election vote that will decide whether they want the country to remain a pro-Ukraine and pro-West nation or put in office the centre-left party of President Zoran Milanović, known for his ties with Russia. 

The two main rivals in the 17 April election will be the governing Croatian Democratic Union (HDZ) and the Social Democratic Party (SPD). These elections could reflect on the results of the European Parliament elections in June and the presidential election, scheduled for December. 

Croatia’s parliament was dissolved in March, paving the way for the upcoming parliamentary elections. The decision came as Prime Minister Andrej Plenković and the HDZ party faced accusations of corruption by the opposition. The latest scandal involves the appointment of a close ally of the HDZ, Ivan Turudić, to the role of prosecutor general. Opponents expressed concern that it was a way for the government to protect itself. 

Croatia’s President Milanović has called to “kick out thieves and abusers from power, and to prevent their return to power for a long time.” 

Prime minister Plenković, who has been in government since 2016, has denied the corruption claims and said his party is ready to continue in office.

“Croatian Democratic Party is ready for yet another term and trust of Croatian citizens,” Plenković said. “May the party always be one step ahead of other political options in all political challenges, and may it lead Croatian people to a better future.”

According to a recent Ipsos poll, HDZ has 27.3 percent of support among Croatians, while the SDP has 22.6 percent. 

Milanović, who has been highly disputed over his critical stance toward the EU and support for Ukraine, will not be running as a lead candidate for prime minister for the SPD. The Constitutional Court ruled in March that he cannot be a candidate in the parliamentary elections while he remains president. 

Malta Company Announcements:

Mariner Finance plc

The Board of Directors of Mariner Finance p.l.c. wishes to inform the general public that a board meeting is scheduled on the 25th April 2024 at 10:00 hours to consider, and if considered appropriate, approve the Company’s Consolidated Annual Financial Statements for the financial year ended 31st December 2023.

M&Z plc

The Board of Directors of the Company hereby announces that it shall be meeting on 25^th April 2024 to consider and, if deemed fit, approve its Annual Report and the audited financial statements for the financial year ended 31 December 2023.

During the meeting, the Board of Directors shall also consider the declaration of a dividend to be recommended to the Company’s Annual General Meeting to be held on the 11 June 2024.

RS2 plc

The Company announces that the Board of Directors is scheduled to meet on the 23rd April 2024 to consider and if thought fit to approve the Group’s and the Company’s Financial Statements for the financial year ended 31 December 2023.

Mercury Projects Finance plc

The Board of Directors of Mercury Projects Finance p.l.c. (the “Company”) is scheduled to meet on 19th April 2024 to consider and, if deemed appropriate, approve, the Company’s audited annual financial statements for the accounting reference period ending 31st December 2023.

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