Wednesday, February 20, 2013

Purchase of HSBC Panama by Bancolombia creates winners and losers

HSBC sold its Panama assets as was rumored already for several months in the local financial center.   HSBC Latin American Holdings (UK) Limited signed with Bancolombia a promise agreement for the sale of HSBC Bank (Panama), S.A.      Previously HSBC BANK (USA) purchased the Panama assets of the then-Chase Manhattan Bank, N.A. - which had operated for more than half a century in Panama - and managed in a few years to squander the goodwill that "El Chase" had generated among local and regional customers.    Any negative customer perception it had after HSBC purchased Banistmo did not matter as long as statements were acceptable and large clients such as the Panama Canal Authority remained.    HSBC subsidiaries also have insurance and brokerage licenses.  Bancolombia does not have experience in major banking in Panama besides a small international license branch, and a labor shortage would it make it difficult to repeat the success in consumer banking that Venezuelan-owned Banesco had in a few years, which hired key staff from banks acquired by other merging banks.

The usual commentators will say this is proof that large banks flee Panama because it is blacklisted in several countries and with the OECD.   This does not explain why HSBC openly promotes its banking services as "offshore" in places like Dubai, Jersey and Hong Kong.

In the end, small markets like Panama are not attractive to mega-banks seeking larger markets like Argentina and Brazil.   Local banks of Panamanian capital continue serving local and foreign customers, while a few international banks find Panama useful to book offshore operations.

Bancolombia Falls After $2.1 Billion HSBC Panama Deal

Bancolombia SA, Colombia’s largest bank, fell for a second day in Bogota trading after agreeing to pay $2.1 billon for HSBC Holdings Plc’s Panama unit in its biggest-ever acquisition.
The company’s preferred shares, which are more actively traded than the common stock, fell 2.5 percent to 29,920 pesos at 12:23 p.m. It was the second-biggest loser today on the country’s benchmark Colcap Index, which fell 0.8 percent.
The acquisition is the second Bancolombia has announced in Central America in two months. The shares have fallen 5.1 percent from this year’s high of 31,460 as analysts including Banco Santander SA’s Boris Molina and Luis Guzman speculated that the company may have to sell equity to pay for acquisitions and meet regulatory capital minimums.
“The stock is responding to the expectation that they’ll have to sell shares, even if they’re not running to do it,” Katherine Ortiz, an analyst at Corredores Asociados SA, said in a telephone interview from Bogota.

More in http://www.bloo

See also
Superintendent of Securities Relevant Fact

HSBC BANK (PANAMA), S.A. Financials
HSBC LEASING, S.A. Leasing financials

HSBC operations remaining elsewhere
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