UK-headquartered global banking giant HSBC has bought Panama bank Grupo Banistmo for $1.8 billion in a bid to expand its footprint in Latin America.
The purchase, equivalent to GBP1 billion, not only enables HSBC to establish a presence in Panama, but also in the neighboring countries of Costa Rica, El Salvador, Honduras, Colombia, and Nicaragua, where Grupo Banistmo also has operations.
While comprehensively served in its core markets of Europe, US and Asia, HSBC’s current ambitious expansion strategy focuses on its less well covered regions. Latin America, with its significant scope for growth in the financial services sector, is a key target within this strategy.
Grupo Banistmo should bolster HSBC’s profits by around $115 million, while adding 220 branches to the UK bank’s global network.
HSBC is paying $52.63 per share, around a 25% premium on Grupo Banistmo’s market value, the BBC has reported.