HSBC agreed to sell its business in Canada to the Royal Bank of Canada for around $10 billion. The purchase will enable RBC to take more market share in its home market, adding 130 branches and more than 780,000 retail and commercial customers
HSBC's disposals have accelerated amid pressure from its biggest shareholder Ping An Insurance Group , which has urged the bank to split off its Asian business to boost returns.
HSBC said it may return some of the proceeds of the sale, expected to net the bank a $5.7 billion pre-tax gain, to shareholders via a one-off dividend or buyback from early 2024 onwards, after the deal has closed.up 0.5%. RBC shares recovered after early falls to trade down 0.2% by late afternoon, while benchmark Canada share index was up 0.3%.
The deal will boost RBC's assets by C$134 billion to C$2 trillion, and add about 130 branches to its existing network of 1,200 branches.Joe Dickerson, an analyst at Jefferies in London, said a big payout could go some way towards appeasing shareholders who were incensed by HSBC curtailing dividends in 2020, at the suggestion of British regulators.HSBC logo is seen on a branch bank in the financial district in New York, U.S., Aug. 7, 2019.
The purchase will enable RBC to take more market share in its home market, adding 130 branches and more than 780,000 retail and commercial customers. If successful, it will be the first big banking merger in a decade in Canada.as it looks to beef up returns following pressure from Ping An.
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