HSBC agrees to sell its Canadian branches to the Royal Bank of Canada.
The value of HSBC Canada's assets stood at $94.6 billion.
HSBC Overseas Holdings (UK) Limited, a wholly-owned subsidiary of HSBC Holdings plc, reported on Tuesday that it agreed to sell its Canadian banking business to the locally-headquartered Royal Bank of Canada (RBC).
The acquisition, which is still subject to governmental and regulatory approval, will allow RBC to obtain 100% of the common equity of HSBC Canada. The deal is valued at $10.1 billion and should be finalized by the end of 2023.
According to the financial data as of September 30, 2022, the sales agreement will provide HSBC Group with a pre-tax gain of $5.7 billion. Assets held by HSBC Canada are valued at $94.6 billion. The Canadian arm of the bank has 130 branches and 4,200 full-time employees, serving nearly 800,000 commercial and retail customers.
HSBC officials acknowledged that the Canadian portion of the business has a "relatively low market share." The limited opportunity to invest in HSBC Canada's growth relative to other markets led to the strategic decision to sell the Canadian arm.
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