Canada Greenlights RBC’s $10B HSBC Unit Acquisition

Uncover the details of Canada's approval for RBC's historic $10B deal and the requirements for its expansion plans.

Canadian Finance Minister Chrystia Freeland has given the green light to Royal Bank of Canada’s proposed acquisition of HSBC’s Canada unit, with a price tag of C$13.5 billion ($10.2 billion). The approval comes with certain conditions aimed at preserving jobs and benefiting the Canadian economy. RBC is expected to close the deal in the first quarter of 2024.

One of the key conditions set by Freeland is the establishment of a global banking hub in Vancouver, which is expected to create more than 1,000 jobs. Additionally, RBC must increase the workforce at its client operations center in Winnipeg, Manitoba, by 10%, resulting in 100 new jobs. The bank is also required to continue providing banking services at a minimum of 33 HSBC branches for the next four years.

In an effort to ease the transition for HSBC clients, RBC has committed to waiving certain fees, including those for transferring mortgages to RBC, international money transfers by nonbusiness clients, and premium accounts for a period of 18 months. Furthermore, RBC has pledged to provide $7 billion in financing for affordable-housing construction across Canada, which is expected to result in the construction of approximately 25,000 new homes.

The approval of the acquisition, along with the conditions set by Freeland, reflects the government's commitment to ensuring that the deal benefits the Canadian economy and workforce. By requiring RBC to create new jobs, maintain banking services, and provide financing for affordable housing, the government aims to mitigate any potential negative impact of the acquisition on the Canadian economy and its citizens.

The approval of Royal Bank of Canada’s acquisition of HSBC’s Canada unit, along with the conditions set by Finance Minister Chrystia Freeland, reflects the government's commitment to preserving jobs and benefiting the Canadian economy. The conditions, including the creation of new jobs, maintenance of banking services, and financing for affordable housing, are aimed at ensuring that the deal has a positive impact on the Canadian workforce and citizens.