BREAKING: Royal Bank of Canada to buy HSBC Bank Canada for $13.5 billion
Canada’s biggest bank will acquire all of HSBC Canada’s shares, and its earnings from June 30 will accrue to RBC. The purchase price is 9.4 times HSBC Canada’s adjusted 2024 earnings of $1.4 billion, RBC said.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc.
RBC is expected to gain $740 million in annualized pre-tax synergies given HSBC Canada’s estimated 2024 non-interest expense base. The Big Six bank will also take on roughly $1 billion in total acquisition and integration costs.Article content HSBC Canada held $134 billion in assets as of Sept. 30 and has about 130 branches and 4,200 employees. The banking segment represents about two per cent of Canadian deposits and mortgages.
“HSBC Canada offers the opportunity to add a complementary business and client base in the market we know best and where we can deliver strong returns and client value given our financial strength and award-winning service,” said RBC president and chief executive Dave McKay in a press release. “This also positions us as the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who need global banking and wealth management capabilities.
The deal is expected to bring a US$5.7 billion pre-tax gain to HSBC once it is completed in late 2023 pending regulatory approval.
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