HSBC considers $1bn bid for Mexico's fifth biggest bank

HSBC, one of the UK's Big Four banks, is eyeing one of Mexico's biggest banks despite being stung earlier this year by the meltdown of a number of Latin American economies.

HSBC is understood to be in talks with Bital, Mexico's fifth-biggest bank, which is worth about $1bn and one of only two banks in the country that are still under Mexican ownership.

HSBC is known to want to build up its presence in Mexico, where it currently only has one branch and an office. It did until 1997 own Serfin, a Mexican financial services business, but sold it back to the government in 2000.

The bank's presence is far greater in other parts of Latin America, including Argentina and Brazil. HSBC was hit by the dramatic unravelling of Argentina's economy at the start of the year, but its investment in Brazil has gone more smoothly. HSBC also has a fledgling presence in Peru and Chile.

HSBC would not comment on whether it was in talks with Bital and an announcement is not thought to be imminent.

HSBC will probably have to fight for the bank. Santander Central Hispano, a Spanish bank, made it clear in April that it was interested, when it bought an 8 per cent stake in the business for $85m (£59m).

Santander now controls 27 per cent of Bital. The remainder is owned by Banco Comercial Português.

Analysts believe there will be a race to grab Bital, which controls 12.5 per cent of Mexico's banking market, because it is the only remaining banking assets in Mexico that could be easily snapped up by a foreign investor. The country's fourth-biggest bank, Banorte, has made it clear that it does not want to do a deal.

Santander has said its strategy includes expanding its presence in Mexico and already has 14 per cent of the market.