Royal Bank of Canada will acquire HSBC's Canadian unit in a deal worth $10 billion in cash and stock.
Royal Bank said in a statement that the deal is expected to be completed by late in the year.
Royal Bank has about 130 more branches after the purchase. Many of the company's clients are in industries that trade and banks internationally.
Money Distilled: What market moves mean for your moneyMoney Distilled: What market moves mean for your moneyMoney Distilled: What market moves mean for your moneyGet John Stepek's daily newsletterGet John Stepek's daily newsletterGet John Stepek's daily newsletterRoyal Bank Chief Executive Officer Dave McKay said in the statement, "HSBC Canada offers the opportunity to add a complement of businesses and clients in the market we know best and where we can deliver strong returns and client value." Commercial clients with international needs, newcomers to Canada, and affluent clients who need global banking and wealth-management capabilities are just some of the clients we can serve.
One of Canada's big banks made a major domestic acquisition. Canada's largest banks have focused their expansion efforts on the US in recent years due to the high concentration of banking in the country.
Canadian banks have struck the industry's two largest acquisitions ever, and both were of US firms. In December, Bank of Montreal agreed to buy the Bank of the West for $16.3 billion in order to expand into the US West. Toronto-Dominion Bank agreed to buy First Tennessee for $13.4 billion.
HSBC Canada had C$134 billion of assets, just over a third of National Bank of Canada. Half of HSBC Canada's net operating income in the most recent quarter was from commercial banking.
All Rights Reserved © 2024
