(5 September 2023 – Canada) Canada's Competition Bureau has ruled Royal Bank of Canada's (RBC) C$13.5 billion offer to acquire HSBC's domestic unit was unlikely to negatively impact competition, enabling the country's largest bank to proceed with its largest ever acquisition.
Set to be closed in Q1 2024, the deal is anticipated to support RBC’s efforts to consolidate its leading position in one of the globe’s most concentrated banking markets. East & Partners long running Canada Business FX service confirms RBC, Scotia Bank, TD, Bank of Montreal, CIBC and HSBC account for almost three out of four primary Spot FX relationships. The top six Canadian lenders control 80 percent of banking assets in total.
The last time a deal of this magnitude was attempted in Canada was in the early 1990s when RBC set out to acquire Bank of Montreal yet were rebuked by regulators. The bureau stated that HSBC Canada's competitive impact was limited when compared to other financial institutions (FIs) and reported that the unit of the British bank had achieved limited market penetration in most financial services.
“We welcome the competition bureau's decision, bringing us one step closer to regulatory approval on this transaction” HSBC Canada said in a statement.