Canada poised to greenlight Royal Bank's acquisition of HSBC Canada in a significant financial move, awaiting final approval. (BNN Bloomberg)
The Canadian government is anticipated to greenlight Royal Bank of Canada's acquisition of HSBC Holdings Plc's Canadian operations in what is considered a significant move.
Sources familiar with the situation, requesting anonymity due to lack of authorization to discuss the matter publicly, revealed that Finance Minister Chrystia Freeland's office is poised to issue a statement approving the deal.
Royal Bank inked a $13.5 billion agreement in November 2022 to purchase HSBC Canada, the nation's seventh-largest bank. This transaction marks Royal Bank's most substantial acquisition, providing it with an opportunity to expand its domestic footprint through HSBC's roughly 130 Canadian branches and assets totaling $120 billion, encompassing wealth management, personal, and commercial banking services.
The Competition Bureau, Canada's antitrust regulator, granted its endorsement to the deal in September, indicating in a report to the finance minister that the merger wouldn't significantly hinder competition.
Despite this approval, the deal awaited the nod from Freeland's office. It encountered resistance from consumer advocates who assert that HSBC Canada has influenced other lenders to lower mortgage rates. Pierre Poilievre, leader of Canada's main opposition party, the Conservative Party of Canada, opposed the merger, citing concerns that it could escalate living costs for Canadians.
Both banks anticipate finalizing the deal in early 2024. However, representatives from RBC and HSBC did not respond immediately to requests for comment on Thursday evening.
