HSBC says to sell Panama unit to Bancolombia for $2.1 bn

HSBC bank said on Tuesday that it had agreed to sell its Panama subsidiary to Bancolombia for $2.1 billion (1.57 billion euros) in cash as part of its plan to slash costs by offloading non-core assets.

"The transaction is subject to regulatory approvals and other conditions and is expected to complete by the third quarter of 2013," HSBC said in a statement.

It added: "The sale represents further progress in HSBC's execution of the strategy set out in May 2011."

HSBC is Europe's biggest bank by assets, was founded in Hong Kong, and sees Asia as its main market despite being headquartered in London.

In 2011, HSBC announced massive cost-cutting measures, including plans to save up to $3.5 billion by 2013 and to axe 30,000 jobs globally.

Since then, the lender has been hit by allegations of money laundering, causing it to last month form a board committee tasked with tackling financial crime.

HSBC recently agreed to pay US authorities a record $1.92 billion to settle allegations of money laundering that were said to have helped Mexican drug cartels, terrorists and Iran.

The bank in December admitted to having "inadequate" controls in place, accepted responsibility for the group's past mistakes and added that it would finalise a deal soon with Britain's Financial Services Authority watchdog.