HSBC splashed out $1.77bn (£954m) to buy Grupo Banistmo, the owner of Panama's largest bank, yesterday. The purchase adds another $6.97bn worth of assets to its books, and gives it a presence in five new markets in Latin America.
The bank is to pay $52.63 a share for the Spain and Panama-listed company, a premium of more than 25 per cent to Thursday's closing price of $42. HSBC said yesterday some 65 per cent of Banistmo's shareholders had already approved the offer - the minimum level of support which it requires to complete the deal.
As well as owning a 99.39 per cent stake in Primer Banco del Istmo, Panama's largest bank, Banistmo also has almost 200 branches across Costa Rica, Honduras, Colombia, Nicaragua and El Salvador. Last year, Banistmo made pre-tax profits of $115m.
Stephen Green, HSBC's chairman, said: "This exciting development will give HSBC a strong presence across a fast-growing economic region which, with the ratification of the Central American Free Trade Agreement (CAFTA), has encouraging prospects. It will allow us to expand into new markets, in a region of 83 million people, including Colombia, and in which large sections of the population do not currently have bank accounts."
Mr Green added that HSBC had little overlap with Banistmo, except in Panama, where it already owns 19 branches. Primer Banco del Istmo will add another 42 branches to its Panama operations.
Sandy Flockhart, the chief executive of HSBC's Mexican operations, will head up the management team for the new enlarged central and south American business. Managers from both Banistmo and HSBC will be picked to work alongside him.
HSBC has now spent more than $20bn on acquisitions in China, the US and South America over the past three years. It recently made smaller acquisitions in Paraguay and Argentina, and applied for a banking licence in Peru in March.
Shares in HSBC fell 9p to 947p, giving it a market value of £109bn. It is the world's third-largest bank behind Citigroup and Bank of America.Reuse content