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HSBC Agrees to Buy Panama’s
Biggest Bank
HSBC Holdings, the British
banking company, agreed
yesterday to buy Panama’s
largest bank, Grupo Banistmo,
for us$1.77 billion in cash to
enter five countries in Latin
America, its fastest-growing
market.
HSBC will pay us$52.63 a share
for Banistmo, 25 percent more
than Thursday’s closing price,
the bank said yesterday in a
statement.
The purchase will give HSBC 220
branches in Colombia, Costa
Rica, El Salvador, Honduras,
Nicaragua and Panama.
The acquisition is the biggest
purchase in Latin America for
HSBC, which has developed from a
regional lender in Asia to the
world’s No. 3 bank through more
than us$60 billion of deals in
the last decade.
“They understand the region and
have been very successful in
Brazil and Mexico,” said Richard
Peirson, who helps manage about
us$8.2 billion, at AXA
Framlington Investment in
London.
Revenue at HSBC’s Latin American
units, which include operations
in Argentina, Chile and Uruguay,
grew at an average 50 percent
pace in the last two years.
Latin America contributed $647
million, or 3.1 percent, to the
bank’s 2005 profit before tax,
up from 2.3 percent. The
chairman of HSBC, Stephen Green,
said the bank was betting on
future growth tied to the
Central American Free Trade
Agreement with the United
States.
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