HSBC agrees to sell its business in Canada to Royal Bank of Canada

Must read

HSBC has agreed to sell its business in Canada to the Royal Bank of Canada for $10 billion – a deal that has the potential to make RBC one of the leading players in the banking market. According to Reuters, six lenders currently control over 80 per cent of outstanding loans in the world and this deal will add RBC to the illustrated list. The deal will be reviewed by Canadian regulators before it is completed but it has come as good news for shareholders who are potentially in line for a massive payout. 

“We decided to sell following a thorough review of the business, which assessed its relative market position within the Canadian market and its strategic fit within the HSBC portfolio,” Chief Executive Noel Quinn said while announcing the details of the deal according to AFP. 

The decision taken by HSBC to quit the Canadian market is the biggest developing in the banking sector of the country since 2012 when ING solid its operations to bank of Nova Scotia for $2.2 billion. It is also the latest attempt by HSBC to cutting down on their retail banking businesses to increase profit. 

When it comes to shareholders, HSBC said that they may returns around $5.7 billion (pre-tax) gain to shareholders in the aftermath of this sale and the dividend pay may happen in early 2024. 

Reuters also reported that the deal to sell its Canadian business will boost RBC’s total assets to $1.4 trillion and will also add 130 branches to their system which exists all around Canada. 

Source link

More articles

- Advertisement -


- Advertisement -

Latest article