HSBC to sell Canadian business for $10bn

HSBC has agreed to sell its Canadian arm to the Royal Bank of Canada (RBC) for over $10 billion.

The bank told its shareholders that an agreement to sell had been reached following a strategic review of HSBC Canada, which has over 130 branches and over 780,000 customers.

It weighed HSBC Canada’s relatively low market share and the group’s overall ability to invest in HSBC Canada’s expansion and growth in the context of opportunities in other markets, concluding that the best course of action for the overall group was to sell the Canada business – a move it said would unlock significant value for the HSBC Group.

“I am pleased that we have reached an agreement with RBC,” said HSBC chief executive Noel Quinn. “The deal makes strategic sense for both parties, and RBC will take the business to the next level.”

He added: “Our group strategy is unchanged and closing this transaction will free up additional capital to invest in growing our core businesses and to return to shareholders.”

Dave McKay, president and chief executive of RBC, said that the move offers the opportunity to add a “complementary business and client base” in the market it knows best, adding that the bank could “deliver strong returns”.

He added: “This also 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.”

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