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Royal Bank of Canada Gets Nod for Purchase of HSBC Unit

Canada at the end of last week approved the implementation of a deal to acquire the internal unit of HSBC by Royal Bank of Canada (RBC) for $10.2 billion.

Royal Bank of Canada Gets Nod for Purchase of HSBC Unit

The media notes that for the mentioned Canadian financial institution, the expansion of the ownership structure as a result of the approved deal will affect the strengthening of positions in the domestic market.

RBC is currently establishing a global banking center in Vancouver. The financial institution also cancels the fees associated with the transfer of mortgages from HSBC. Moreover, the lender has announced its intention to ensure the protection of the workforce of the acquired unit of an international commercial bank headquartered in London.

As part of the deal, RBC is committed to increasing the number of employees at its Winnipeg customer operations center by 10%. The bank will also provide $7 billion in financing for projects related to the building of affordable housing across Canada. The Moreover financial institution will continue its customer service activities at at least 33 HSBC branches.

Canadian Finance Minister Chrystia Freeland stated that the global banking center in Vancouver will support more than 1,000 jobs and create about 440 net new jobs in British Columbia.

HSBC announced that it is working with RBC to promote the deal. The bank expects the deal to close in the first quarter of next year.

HSBC is currently considering paying a special dividend of 21 cents per share from revenue in the first half of 2024.

RBC is confident that the upcoming acquisition, which brings together Canada’s largest and seventh-largest lenders, will strengthen its domestic and global position.

The head of the Personal & Commercial Banking Group, Neil McLaughlin, during a conversation with media representatives, said that HSBC can make transactions in various currencies that are now available and which will become such after the deal is implemented. He also noted that in this case, the conditions put forward by the Ministry of Finance did not become obstacles to movement on the way to acquisition.

As we have reported earlier, Analyst Downgrades Royal Bank of Canada.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.