Revenue growth is slowing in HSBC's core markets

The deal gives the bank - the world's third-biggest - 220 branches in Panama, Costa Rica, El Salvador, Honduras, Colombia, Nicaragua and the Bahamas.

HSBC is looking to expand in Latin America, an emerging market with higher growth potential than its core regions of Europe, the US and Hong Kong.

Banistmo, Central America's biggest bank, posted profits of $115m in 2005.

"With North and South America already generating the lion's share of profits (about 36%) this acquisition continues to reduce the group's dependence on its former home territory of Hong Kong , while raising exposure to the growing emerging market regions," said Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers.

Over the last two years, HSBC has seen revenues from its Latin American operations - which include Argentina, Brazil and Chile - grow at an average of 50%.