BY Fraser Tennant
In a deal designed to position it as the bank of choice for globally connected clients, multinational financial services company Royal Bank of Canada (RBC) is to acquire personal and commercial bank HSBC Bank Canada.
Under the terms of the agreement, RBC will acquire 100 percent of the common shares of HSBC Canada for an all-cash purchase price of $13.5bn.
The acquisition will see HSBC Canada’s strength in international products combine with RBC’s breadth of capabilities, providing a best-in-class set of solutions to help clients meet their financial goals, build their wealth and grow their businesses.
HSBC’s exit from Canada marks the first major banking deal in Canada since ING sold its local operations to Bank of Nova Scotia for C$3.1bn in 2012.
“This acquisition builds on our core domestic retail business and expands our international product capabilities,” said Neil McLaughlin, group head of personal & commercial banking at RBC. "We look forward to welcoming HSBC Canada's talented employees after the transaction closes and supporting them as they continue to serve their clients. With strong cultural and risk alignment and a shared focus on client service, we can build together on HSBC Canada's leading international products.”
As Canada’s biggest bank and one of the largest in the world, based on market capitalisation, RCB has a diversified business model with a focus on innovation and providing exceptional experiences to its 17 million clients in Canada, the US and 27 other countries.
“I am pleased that we have reached an agreement with RBC,” said Noel Quinn, chief executive of HSBC Group. “The deal makes strategic sense for both parties, and RBC will take the business to the next level. We look forward to working closely with RBC's leadership team to ensure a smooth transition for our clients and colleagues.”
The transaction is expected to close by late 2023, subject to customary closing conditions including regulatory approvals, obtained in the ordinary course.
“This acquisition positions us as the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who need global banking and wealth management capabilities,” concluded said Dave McKay, president and chief executive of RBC. “It will also help us better serve global clients looking to invest and grow in Canada.”
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