(Reuters) -HSBC Holdings ( HSBC ) said on Tuesday that it will sell its Argentina business to Grupo Financiero Galicia, the country's largest private financial group, in a deal valued at $550 million.

The Asia-focussed bank said its unit, HSBC Latin America B.V., has signed a deal to sell the operations in Argentina to Galicia.

"HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network," the company said in a statement.

The Argentina business, given its size, generates substantial earnings volatility for the group when its results are translated into US dollars, HSBC ( HSBC ) indicated.

Buenos Aires-based Galicia is Argentina's fifth largest bank.

HSBC ( HSBC ) expects to record a $1 billion pre-tax loss on the divestment in the first quarter of fiscal 2024.