OTTAWA, Canada – Chrystia Freeland, deputy prime minister and minister of finance, pursuant to her authorities under the Bank Act, on Thursday, approved the sale of HSBC Bank Canada (HSBC) to Royal Bank of Canada (RBC), subject to strict terms and conditions imposed on RBC.
RBC’s proposed acquisition followed HSBC Global’s November 2022 announcement of its exit from the Canadian market, which is part of the restructuring of its operations in several markets around the world, including in the United States and Europe.
HSBC currently employs about 4,000 people in Canada and provides banking services to around 780,000 Canadians. Protecting these jobs, maintaining the services provided to Canadians, and expanding consumers’ access to competitive banking services were central considerations in the government’s decision.
In approving this transaction, the minister of finance has secured significant commitments from RBC to protect consumers and workers:
- Protect HSBC’s Canadian workforce;
- Establish a new Global Banking Hub in Vancouver, supporting more than 1,000 jobs and creating about 440 net-new jobs in British Columbia;
- Increase its client operations centre workforce in Winnipeg by 10 percent, which will create 100 new jobs, including for francophone Manitobans;
- Continue providing banking services at a minimum of 33 HSBC branches, as well as all ATMs in these branches, for four years;
- Waive certain fees for HSBC clients, including for transferring mortgages to RBC, international money transfers by non-business clients, and premium accounts for 18 months;
- Provide $7 billion in financing for affordable housing construction across Canada, to support the construction of an estimated 25,000 new homes;
- Provide additional retail lending support for redeveloping single-family homes into multi-family homes; and,
- Maintain Mandarin and Cantonese banking services at HSBC branch locations that RBC will continue to operate.
This decision follows the advice and comprehensive analyses of relevant federal departments and agencies. These include:
- The Competition Bureau, which detailed in its public report to the Minister of Finance that the proposed acquisition would not result in a substantial lessening or prevention of competition in the Canadian financial sector. The Competition Bureau also reported that:
- The proposed acquisition would not lessen competition for mortgage rates, which “were most frequently driven by competition from Big Five Banks.”
- Given HSBC currently has less than a 2 percent market share, RBC’s post-acquisition market share would not significantly increase, noting “HSBC Canada had achieved limited market penetration.”
- The Office of the Superintendent of Financial Institutions (OSFI), which had no objections to the transaction and recommended approving the sale.
- The Department of Finance, which held public consultations and conducted significant analysis of potential impacts on Canadians and the Canadian financial sector.
To continue protecting Canadian consumers and upholding competition and stability in the Canadian financial sector, the department of finance announcing the launch of new consultations on strengthening competition in the financial sector.
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