The Royal Bank of Canada (RBC) is set to complete its historic $13.5 billion acquisition of HSBC Holdings PLC’s Canadian subsidiary on March 28.
This move is set to be the largest domestic banking deal in history, and it comes earlier than initially planned, with the closure happening less than six months from its first announcement.
The final approval for this acquisition came from Ottawa in December, following a period of scrutiny and opposition from various stakeholders and federal opposition parties.
Through the acquisition of HSBC Canada, RBC will significantly bolster its holdings, adding a considerable number of deposits, mortgages, and commercial loans to its portfolio.
It will also enhance its international banking services.
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HSBC Canada, which is part of the British-based HSBC group, currently employs about 4,000 people and serves roughly 780,000 clients across Canada.
Post-acquisition, RBC will start integrating HSBC’s products and services into its system. The transition is set to begin immediately after the deal closes, with HSBC branches and offices scheduled to reopen as RBC locations on April 1.
The acquisition initially faced skepticism from various quarters. The House of Commons finance committee had earlier recommended against the deal, citing concerns over its potential impact on competition and affordability in Canada’s banking sector.
However, Canada’s competition watchdog did not express any alarm over the acquisition. Early approval was given in September, and the Office of the Superintendent of Financial Institutions also recommended the sale.
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As part of securing federal government approval, RBC agreed to several conditions, including job retention in the short term, financing affordable housing projects, and maintaining a specific number of HSBC branches.
RBC CEO Dave McKay stated these conditions align with the bank’s strategic goals and would not affect the financial benefits of the deal.
This acquisition is a significant step for RBC, indicating its commitment to expanding its service offerings and client base in Canada.
It also marks a notable moment in the Canadian banking industry, demonstrating RBC’s strategic growth and expansion efforts.
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