OTTAWA – The Royal Bank of Canada (RBC) has purchased HSBC Bank Canada (HSBC), and the transaction has been approved by the Department of Finance Canada.
The sale was announced in November, 2022 after HSBC Global announced its exit from the Canadian market, and is subject to strict terms and conditions imposed on RBC.
HSBC currently employs about 4,000 people in Canada and provides banking services to approximately 780,000 Canadians. Protecting these jobs, maintaining the services provided to Canadians, and expanding consumers’ access to competitive banking services were central considerations in the government’s decision.
In approving this transaction, the Minister of Finance secured significant commitments from RBC to protect consumers and workers:
- Protect HSBC’s Canadian workforce;
- Establish a new Global Banking Hub in Vancouver, supporting more than 1,000 jobs and creating about 440 net-new jobs in B.C.;
- Continue providing banking services at a minimum of 33 HSBC branches, as well as all ATMs in these branches, for four years;
- Waive certain fees for HSBC clients, including for transferring mortgages to RBC, international money transfers by non-business clients, and premium accounts for 18 months;
- Provide $7 billion in financing for affordable housing construction across Canada, to support the construction of an estimated 25,000 new homes;
- Provide additional retail lending support for redeveloping single-family homes into multi-family homes; and,
- Maintain Mandarin and Cantonese banking services at HSBC branch locations that RBC will continue to operate.
This decision follows the advice and comprehensive analyses of relevant federal departments and agencies, including the Competition Bureau, which detailed in a public report that the proposed acquisition would not result in a substantial lessening or prevention of competition in the Canadian financial sector.
The Competition Bureau stated that the proposed acquisition would not substantially lessen competition for mortgage rates, which “were most frequently driven by competition from Big Five Banks”, and that, given HSBC currently has less than a 2 per cent market share, RBC’s post-acquisition market share would not significantly increase, noting that “HSBC Canada had achieved limited market penetration”.
Business Examiner Staff
