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Last Updated: Friday, 21 July 2006, 08:44 GMT 09:44 UK
HSBC buys Panama bank for $1.8bn
HSBC bank
Revenue growth is slowing in HSBC's core markets
HSBC has boosted its Latin American presence with the $1.8bn (1bn) takeover of Panama's Grupo Banistmo.

The deal gives the bank - the world's third-biggest - 220 branches in Panama, Costa Rica, El Salvador, Honduras, Colombia, Nicaragua and the Bahamas.

HSBC is looking to expand in Latin America, an emerging market with higher growth potential than its core regions of Europe, the US and Hong Kong.

Banistmo, Central America's biggest bank, posted profits of $115m in 2005.

"With North and South America already generating the lion's share of profits (about 36%) this acquisition continues to reduce the group's dependence on its former home territory of Hong Kong , while raising exposure to the growing emerging market regions," said Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers.

Over the last two years, HSBC has seen revenues from its Latin American operations - which include Argentina, Brazil and Chile - grow at an average of 50%.

Under the cash deal, agreed by 65% of Banistmo's shareholders, HSBC is paying $52.63 per share: a 25% premium on Banistmo's closing price on Thursday.

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