HSBC (NYSE:HSBC) has announced that it has entered into an agreement to sell Panamanian subsidiary HSBC Bank (Panama). The buyer is South American financial Bancolombia (NYSE:CIB), which is to pay $2.1 billion in cash for the unit.

The divestment is part of HSBC's overall strategy to reduce its global footprint. More locally, the bank aims to concentrate its efforts in Latin America on the core markets of Brazil, Mexico, and Argentina.

Meanwhile, Bancolombia is aiming for an expanded presence outside of its native Colombia. It already has a presence in Panama, one of the region's strongest economies.

The transaction is subject to approval from the relevant regulatory authorities, among other conditions. It is expected to close by Q3 of this year.

Fool contributor Eric Volkman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.