HBCYF - Grupo Financiero Galicia: HSBC Argentina Acquisition Adds New Fuel To The Bull Case

2024-04-15 00:07:09 ET

Summary

• The stars are aligning for Argentine banks.
• Galicia stands out as a key beneficiary.
• The buyout of HSBC Argentina adds legs to Galicia’s post-election rally.

Argentina’s banking system has long been a fragmented one, with no major bank, not even the state-owned Banco Nacion, holding a dominant share of system assets. But ongoing economic turbulence and the rise of a new economic regime under President Javier Milei mark a potential step-change in future industry dynamics. Last week’s exit by HSBC Holdings plc ( HSBC ) from Argentina, coming on the heels of a similar move by Itaú Unibanco ( ITUB ) last year, only reinforced the case for more consolidation among the major domestic banks. The beneficiary this time around, not just strategically but also financially (transaction price at a deep discount to book), is Grupo Financiero Galicia ( GGAL ), the holding company for banking arm Banco Galicia and insurance arm Galicia Seguros....

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