The Finance Department of Canada said in a statement that the acquisition of HSBC Holdings’ Canadian operations by Royal Bank of Canada has been approved by the Canadian government, subject to certain requirements.
As a condition of the agreement, RBC has promised to build a global banking hub in Vancouver, support over 1,000 jobs, and add roughly 440 net new jobs to British Columbia. This was obtained by Canadian Finance Minister Chrystia Freeland.
The C$13.5 billion (USD 10.17 billion) deal was approved by Canada’s Competition Bureau in September. The bureau stated that although the deal was unlikely to negatively impact competition, it would “result in a loss of rivalry between Canada‘s largest and seventh-largest banks.”
The bureau also concluded that, in comparison to other financial institutions, HSBC Canada’s competitive impact was minimal and that, in the majority of financial services, the British bank’s division had only modest market penetration.
Pierre Poilievre, the leader of the Conservative party in Canada, and the House of Commons had both criticised the deal when it was first announced in late 2022.
Poilievre has called on Ottawa to reject the agreement, stating that obstructing it is a clear way for the government to address concerns about affordability.
According to RBC, the transaction should close in the first quarter of 2024. HSBC, formerly promoting itself as the “local bank of the world,” currently boasts over 130 branches and 780,000 clients in Canada.
Its strategy to reduce its global footprint and concentrate on the Chinese market included the withdrawal from Canada.
Meanwhile, according to Bloomberg, South Korea’s financial watchdog has recommended that HSBC Holdings Plc and BNP Paribas SA be subject to combined fines of at least 10 billion won (USD 7.7 million) for engaging in what is known as “naked short selling,” which is illegal in the nation.