The Royal Bank of Canada (RBC) announced on Tuesday the acquisition of the Canadian subsidiary of the British giant HSBC for $13.5 billion.
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The acquisition, paid in cash, will allow RBC to reap the income generated by HSBC Canada from June 30, the company said.
But above all, the transaction will allow RBC to get its hands on a whole new clientele.
HSBC Canada accumulated, as of September 30, 4,200 employees in Canada in 130 branches, with some 134 billion in assets.
“HSBC Canada helps add complementary customers and businesses in the market we know best and where we can deliver high returns and deliver value to our customers through our financial strength and award-winning service,” RBC President and CEO Dave McKay said in a statement.
The transaction will also allow RBC to better establish itself in the international market.
“This transaction also positions us as the bank of choice for business customers with international needs, newcomers to Canada and affluent customers who require global banking and wealth management capabilities,” said M. McKay.
HSBC employees will join the approximately 92,000 workers who already work for RBC, including approximately 65,000 in Canada.
Closing of the transaction is expected to occur by the end of 2023, if cleared by regulatory authorities.
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Not good news, according to the NDP
For the leader of the NDP, Jagmeet Singh, this merger “does not bode well” and risks resulting in “more profits for the big banks, fewer options for Canadians”.
“Canadians are already struggling with the high cost of essentials and higher interest rates and fees from the big banks in Canada. Today’s news of the potential merger of two big banks will only reduce the flexibility of Canadian families and put more money in the pockets of big bank executives,” he said in a statement. communicated.
Jagmeet Singh is calling on the Liberal government to “stop this merger” and strengthen the Competition Act to “protect people.”
“As the cost of living soars, Justin Trudeau’s Liberals and Pierre Poilievre’s Conservatives are siding with big banks and their profits at the expense of Canadian families and their pocketbooks,” he said. lamented.