Fri. Feb 23rd, 2024

HSBC expects to complete merger with RBC in 2024

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The Royal Bank of Canada has reached an agreement in 2022 to acquire HSBC Bank Canada for $13.5 billion.

The Canadian Press

HSBC Bank expects the sale of its Canadian operations to Royal Bank of Canada (RBC) to be completed before the end of the first quarter of 2024, as the merger cleared its final hurdle on Thursday when Minister of Finance, Chrystia Freeland, authorized it.

Freeland's green light came after the Competition Bureau approved the $13.5 billion transaction in September.

The The minister's approval came with conditions imposed on RBC, including that none of HSBC Canada's 4,000 employees be laid off within six months of the closing date, or two years for front-line staff. /p>

RBC will also be required to ensure that banking services continue to be provided in at least 33 HSBC Canada branches for four years.

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Finance Minister Chrystia Freeland authorized the merger of HSBC Bank Canada with RBC on Thursday. (File photo)

In a brief update released on Friday, HSBC confirmed that it continues to make progress with RBC on the implementing the transaction.

Many people had called for RBC's acquisition of HSBC Canada to be blocked, as they believed such a merger would harm competition in the already highly concentrated banking industry.

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The Conservative leader, Pierre Poilievre, had called for the blocking of the ;agreement, saying Canada's banking sector is too concentrated and the loss of HSBC Canada will only make the situation worse.

The committee of Finance of the House of Commons also expressed fears that this transaction would harm competition.

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RBC President and CEO Dave McKay , maintains that competition will remain strong in the country in the banking sector, despite this merger. (File photo)

RBC CEO Dave McKay said rejecting the deal would have been a bad signal for foreign investors.

In an interview on Thursday, Mr. McKay maintained that there is strong competition in the banking sector and that the acquisition of HSBC Canada by his institution will not change anything.

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