HSBC, which has had a foothold in Panama since 1972, would add Chase's 11 branches there to its network of five existing Panama branches, which hold about $477 million in assets. The acquisition would be made by its US arm, HSBC Bank USA.

The British bank has been building up its operations onthis side of the Atlantic Ocean, buying US-based Republic New York at the end of last year. This latest deal is expected to be completed in the third quarter."We are committed to the Panama business, both retail and commercial," Youssef Nasr, president and chief executive of HSBC Bank USA, said.

Chase, for its part, is more focused on business from companies and wealthy individuals in Latin America, not retail customers, it said.

"The sale of these branches in Panama, which primarily serve individual retail customers, is consistent with Chase's strategic focus on providing financial products and services to institutional, sovereign and high net-worth private clients in the region," Brian O'Neill, chairman of Chase in Latin America, said in a statement.

Chase shares rose 3-1/16 to 76-13/16 on the New York Stock Exchange on Tuesday.

Chase had seven branches in Panama City, two branches in Colon City, one branch in David and one branch in Chitre. Their combined book value was $27 million. All Chase employees would become employees of HSBC Bank USA after the deal closed, the banks said.

HSBC Bank USA already has more than 450 branches in New York, seven branches in Florida and two in Pennsylvania. An HSBC group subsidiary, Republic Bank California NA, has three branches in California.