RBC gets a Christmas gift from Ottawa as $13.5 billion HSBC deal is approved

The Canadian finance minister’s approval of the $13.5 billion transaction Thursday means that the two banks can now work together on a smooth transition for HSBC Canada’s 4,000 employees and 800,000 clients.

RBC’s CEO and president Dave McKay thanked the finance ministry, OFSI, and Competition Bureau for their review of the acquisition, which will add a significant amount to RBC’s loan book, further cementing its position as Canada’s largest lender. As of September 30, HSBC Canada’s total assets were $134 billion.

“The acquisition of HSBC Canada is good for the country and Canadians,” he said. “Not only will this keep more of Canada’s financial sector under Canadian ownership, but it will also allow more Canadians to access the global economy by combining the strength and scale of RBC with the international banking capabilities and financial products that HSBC Canada is known for.”

HSBC’s decision to exit the Canadian banking market reflects the challenges facing the global banking industry. Although the firm is long-established in Canada, it only has a 2% market share, and that limits the amount of investment the British-owned firm can allocate to the business unit.

“It is therefore in the best interests of HSBC Canada’s customers that the bank becomes part of RBC, which will be able to take it to the next level,” HSBC CEO Noel Quinn told Bloomberg.

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