HSBC to expand into Central America acquiring Grupo Banistmo

AGREEMENT: An agreement has been entered into with Grupo Banistmo S.A. ('Banistmo'), the leading banking group in Central America by HSBC to make a tender offer to acquire all the outstanding shares of Banistmo, for cash. The transaction values Panama-based Banistmo at US$ 1.77 billion.

The Banistmo group's principal area of operation is Panama but the group also has a significant presence elsewhere in the region where HSBC does not already operate, providing a solid platform for future growth, an HSBC media release said.

Banistmo owns 99.39 per cent of Panama's largest bank, Primer Banco del Istmo ('Banco del Istmo'), which offers a full ranger of personal, commercial and investment banking services through 42 branches.

The Banistmo group also owns the country's largest insurance company, Compania Nacional de Seguros ('Conase').

These operations in Panama will complement HSBC's existing presence in the country. where HSBC's wholly owned subsidiary, HSBC Bank (Panama) S.A. provides services to personal and corporate customers through 19 branches.

The Banistmo group also has a significant presence across Central America, providing a full range of personal and commercial banking services through a further 106 branches in Costa Rica, Honduras, Colombia and Nicaragua, Additionally, in February 2006 Banistmo completed the acquisition of a 56 per cent stake in Inversions Financiers Bancosal SA, the holding company for Banco Salvadoreno which operates through 72 branches in El Salvador.