Wednesday, September 06, 2006

HSBC Set to Grow LatAm Gross Profits 40% in 3-4 Years

BNamericas, 6 September 2006

UK bank HSBC is aiming to boost gross profits from its Latin American operations 40% to some US$1.4bn over the next 3-4 years, an HSBC spokesperson told BNamericas.

That growth target aims to boost the region's contribution to HSBC's worldwide gross profit to 10-12% from 7.5%, the spokesperson said. Today, Mexico alone accounts for half HSBC's profit in the region at some US$634mn.

HSBC is aiming to achieve its growth target through organic growth but does not rule out further acquisitions to extend its footprint in Latin America, the spokesperson added.

On July 21, HSBC announced an agreement to acquire Panamanian financial group Banistmo for US$1.77bn in cash to boost HSBC's presence in Panama and enter Costa Rica, Honduras, Colombia, Nicaragua and El Salvador.

The bank has already said it may pursue further acquisitions in Colombia after closing the Banistmo purchase.

On October 1, HSBC will launch a new unit to manage its Latin American operations to be headed by HSBC Mexico chief Sandy Flockhart, the spokesperson said.

HSBC has managed its Mexican and South American operations as separate business units.

Earlier this year, HSBC became one of Argentina's top five private banks by acquiring the Argentine unit of Italian bank BNL for US$155mn. The bank also paid US$15mn for the Paraguayan unit of UK financial services group Lloyds TSB (NYSE: LYG).