HSBC has agreed to buy the largest banking group in central America in a bid to boost its presence across Latin America.
In a statement, Europe's biggest lender confirmed details of the $1.77 billion (£958 million) takeover of Panama's Grupo Banistmo.
Under the all-cash offer, Banistmo's stockholders will receive $52.63 for each of their shares – representing a 25 per cent premium on the company's closing price yesterday.
HSBC said that owners of 65 per cent of Banistmo's stock had already agreed to sell their shares in response to the offer.
The proposed takeover deal will see HSBC add a further 220 bank branches to its Latin American portfolio, expanding coverage to include Panama, Costa Rica, El Salvador, Honduras, Colombia, Nicaragua and the Bahamas.
The London-based banking group, which already owns branches in countries such as Argentina, Brazil, Chile and Mexico, is keen to expand its presence in the region amid slowing market growth in the United States and Europe.
"HSBC has been shifting its focus to emerging markets,' explained Victor Tsang at Hong Kong-based Quam Capital Holdings.
"Growth in the US and Europe is slowing. It has to look elsewhere for profit growth," he added.
Further explaining the bank's decision to expand into Latin America, head of HSBC's Mexico operations, Sandy Flockhart told reporters in Panama City: "The area is interesting to HSBC because of its political stability."
"It's a good opportunity to grow operations in the countries where we have a strong front office in Banistmo."
HSBC's Latin American revenues have grown at an average of 50 per cent over the last two years.