HSBC Holdings Regulatory News (HSBA)

21 Jul 2006 07:35

HSBC Holdings PLC21 July 2006 HSBC TO EXPAND INTO CENTRAL AMERICA BY ACQUIRING GRUPO BANISTMO An agreement has been entered into with Grupo Banistmo S.A. ('Banistmo'), theleading banking group in Central America, to make a tender offer to acquire allthe outstanding shares of Banistmo, for cash. The transaction valuesPanama-based Banistmo at US$1.77 billion. The Banistmo group's principal area of operation is Panama but the group alsohas a significant presence elsewhere in the region where HSBC does not alreadyoperate, providing a solid platform for future growth. Banistmo owns 99.39 per cent of Panama's largest bank, Primer Banco del Istmo('Banco del Istmo'), which offers a full range of personal, commercial andinvestment banking services through 42 branches. The Banistmo group also ownsthe country's largest insurance company, Compania Nacional de Seguros('Conase'). These operations in Panama will complement HSBC's existing presence in thecountry, where HSBC's wholly owned subsidiary, HSBC Bank (Panama) S.A., providesservices 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 afurther 106 branches in Costa Rica, Honduras, Colombia and Nicaragua.Additionally, in February 2006, Banistmo completed the acquisition of a 56 percent stake in Inversiones Financieras Bancosal SA, the holding company for BancoSalvadoreno which operates through 72 branches in El Salvador. At 31 December 2005, Banistmo had total assets of US$6,973 million andshareholders' funds of US$695 million. It made a profit after tax^ of US$115million in 2005. At 31 December 2005, Banco Salvadoreno had total assets ofUS$1,778 million, shareholders' funds of US$160.45 million and made a profitafter tax^^ of US$16.9 million during the year. Stephen Green, Group Chairman of HSBC Holdings plc, said: "We are delighted tohave reached agreement to acquire control of the leading banking group inCentral America. This is the culmination of two and a half years' work examiningthe region and choosing our partner. "This exciting development will give HSBC a strong presence across a fastgrowing economic region which, with the ratification of the Central AmericanFree Trade Agreement ('CAFTA'), has encouraging prospects. It will allow us toexpand into new markets, in a region of 83 million people, including Colombia,and in which large sections of the population do not currently have bankaccounts. "We look forward to welcoming Banistmo's customers to HSBC. Banistmo will bringus significant market share and growth opportunities in all markets. We havelittle overlap except in Panama, and we expect to benefit from the scale andknowledge that Banistmo brings from operating in the region. This acquisitionwill enable us to better serve the needs of our regional and internationalcustomers." Alberto Vallarino, CEO of Banistmo, added: "With its significant internationalnetwork, I know that HSBC's acquisition of Banistmo will bring real benefits toour customers. HSBC has recognised the value of Banistmo's business model andleadership position in this promising market. This transaction will be apositive contributor to the region's development." Upon completion of the acquisition, a senior management team will be selectedfrom both organisations, and will be led by Sandy Flockhart, an HSBC GroupGeneral Manager and Chairman and CEO of Grupo Financiero HSBC in Mexico. Under the terms of the agreement, Banistmo shareholders will be entitled toreceive US$52.63 for each share of Banistmo common stock held. The proposedoffer has been unanimously approved and recommended by Banistmo's board ofdirectors. Additionally, shareholders holding in aggregate 65 per cent of theissued share capital of Banistmo have entered into an agreement with HSBC totender their shares in accordance with the terms of the proposed offer. The transaction is subject to certain conditions, including the receipt ofregulatory approvals and at least 65 per cent of all the outstanding shares ofBanistmo being tendered in the offer. HSBC expects to complete the transaction during the fourth quarter of 2006. Footnotes^ Under IFRS.^^ Under El Salvador GAAP. 1. HSBC in PanamaHSBC has been present in Panama since 1972. HSBC Bank (Panama) S.A. has 19branches and 70 ATMs, distributed among the cities of Panama, Colon, Aguadulce,Chitre and David, providing a full range of banking products and servicesincluding commercial and consumer banking, HSBC Premier, private banking andcorporate banking. In 2005, HSBC Bank (Panama) S.A. acquired the entire sharecapital of the Financomer Group in Panama for a cash consideration ofUS$21million. 2. HSBC Holdings plc.HSBC Asia Holdings BV is a wholly owned subsidiary of HSBC Holdings plc. TheGroup serves over 125 million customers worldwide through some 9,500 offices in76 countries and territories in Europe, the Asia-Pacific region, the Americas,the Middle East and Africa. With assets of US$1,502 billion at 31 December 2005,HSBC is one of the world's largest banking and financial services organisations.HSBC is marketed worldwide as 'the world's local bank'. 3. Grupo Banistmo, S.A.Grupo Banistmo is the leading banking group in Central America, with operationsin Panama, Colombia, Costa Rica, Nicaragua, Honduras, El Salvador and Bahamas.At 31 December 2005, Grupo Banistmo had assets of US$6,973 million andshareholders' funds of US$695 million. This information is provided by RNS The company news service from the London Stock Exchange