Colombia’s Bancolombia on Tuesday acquired HSBC Panama for $2.1 billion, reportedly the most ever paid by a local bank.
Bancolombia’s bold move fits in with their apparent overall internationalization strategy. The total transaction is expected to be finalized during the third quarter of this year after all necessary regulatory approvals on the Colombia and Panama sides are met.
“Panama is one of the largest and most sophisticated financial systems in the region, which has been characterized by its strength and profitability,” said the President of Bancolombia, Carlos Raul Yepes. “We are proud of the progress we have made, which allowed us to follow and be part of the growth of Panama.”
Bancolombia’s Panamanian expansion actually began in 1973 when it received a license to operate in the central American country. Since then, Bancolombia has set up operations in El Salvador, Puerto Rico, the Cayman Islands, Peru, Guatemala, and Miami.
Yepes said that his company would make the payment in cash as the bank has no plans to sell off its debt in order to finance the purchase.
“We have capital, we have liquidity, our levels of solvency are well above the requirements,” said Yepes.
- Bancolombia S.A. adquiere el Banco HSBC Panama (Press Release)
- Colombia’s Bancolombia to buy HSBC Panama for $2.1 bln (Reuters)