Police raid on Argentine office sends HSBC's stock 2% lower

Shares in HSBC fell yesterday in the wake of raids on its offices in Buenos Aires by police investigating the transfer of funds out of Argentina.

The authorities raided the offices of several banks, including local units of HSBC, the New York-based Citigroup and Spain's BBVA, as part of an investigation into the transfer of money ahead of the imposition of capital controls.

An HSBC spokesman in London confirmed its offices in the Argentine capital had been visited and said it was collaborating fully with the authorities. The banking giant declined to comment further.

Although none of the banks have been formally charged, one of the investigating judges, Norberto Oyarbide, last night told the news agency Reuters: "Those bringing the complaint say possible crimes include misappropriation of funds [and] fraud within the public administration."

Analysts believe HSBC could face losses of up to £1.4bn from the crisis in Argentina. Yesterday its shares closed down 18p, or 2.2 per cent, at 773.5p.

The raids came three days after an opposition Argentine congressman, Mario Cafiero, used a visit to London to appeal to the Bank of England to help Argentina track down money moved out of the country. He said banks including HSBC and Lloyds TSB were holding $6bn (£4bn) on behalf of Argentines that should now be returned. Both banks have denied they have done anything unlawful.

The country plunged into crisis last month after it defaulted on its $150bn debts. It abandoned its one-to-one currency peg with the dollar and last week devalued the peso. In the run-up to the devaluation people flocked to the banks in a bid to retrieve their savings, prompting the new government to impose strict banking rules.

The central bank has tried to prop up the currency by buying pesos to prevent its collapse. But yesterday Anne Krueger, the deputy managing director of the International Monetary Fund, warned against large-scale intervention.