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Wednesday, 21 August, 2002, 14:34 GMT 15:34 UK
HSBC buys Mexico's biggest retail bank
Bital logo
Banco Bital has about 6 million customers
British banking group HSBC has agreed to buy one of Mexico's biggest banks, Grupo Financiero Bital, in an all-cash deal worth more than $1bn.

The acquisition, which has been in the pipeline for several months, comes despite a new mood of caution towards Latin American investments in the wake of Argentina's economic meltdown.

HSBC chief executive Keith Whitson brushed aside such concerns, describing Mexico's economic prospects as "impressive."

Bital's chairman Luis Berrondo said HSBC's move was "a clear and positive sign of the confidence the international markets have in our country".

Backing of the board

Under the deal, HSBC would pay a total of $1.14bn (706m) for Bital, provided all of the Mexican bank's shareholders agree to sell their stake.

Bital's board of directors has recommended that shareholders accept the deal, and so far, investors holding 52% of its stock have agreed to sell.

Bital's major shareholders include Banco Santander Central Hispano of Spain, which had been expected to launch a rival takeover bid.

HSBC said Bital would tie in well with its North American operations.

"The acquisition ... will enable us to become one of the few banks that can facilitate trade seamlessly amongst the (North American Free Trade Agreement) countries," Mr Whitson said.

Recovery hopes

Grupo Bital's main subsidiary is Banco Bital, Mexico's biggest retail bank, boasting more than 6 million customers and 1,400 branches.

Mexico sank into recession last year at the same time as the US, its biggest export market.

But figures out last week showed that the Mexican economy registered positive growth during the three months to June, the first time it had done so for a year.

See also:

18 Jul 02 | Business
28 Mar 02 | Business
04 Mar 02 | Business
21 Feb 02 | Science/Nature
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