HSBC expands Central American stake

LONDON - HSBC will buy Panama's Grupo Banistmo for US$1.77 billion ($2.7 billion) in cash, adding 220 bank branches in Central America, its fastest-growing market.

Banistmo owns 99.39 per cent of Primer Banco del Istmo, Panama's largest bank.

HSBC will gain access to five new markets in Latin America, where its revenue grew at an average of 50 per cent between 2004 and last year, double the pace of Europe and North America. The London-based lender has spent more than US$20 billion in the past three years to expand in the US, China and South America.

The acquisition will add 42 outlets in Panama and 178 branches in Costa Rica, Honduras, Colombia, El Salvador and Nicaragua.

HSBC posted profit before tax of US$647 million in Latin America last year, or 3 per cent of its total. Assets in the region reached US$24.7 billion at December 31, representing 2 per cent of its total.

- BLOOMBERG