HSBC has agreed to sell its Canadian division to the Royal Bank of Canada for $10.1 billion, the Asia-focused banking giant announced on Tuesday.
The big sale comes after UK-listed HSBC was urged by its largest shareholder, Ping An Insurance Group, to cut costs and move more resources to Asia.
HSBC added in a statement that it would use the funds to invest in its core business and return money to investors.
“We have made the decision to sell after a thorough review of the business… and have concluded that the sale offers significant value,” said Chief Executive Noel Quinn.
HSBC Group Chief Executive Noel Quinn speaks at the Global Financial Leaders Investment Summit in Hong Kong on November 2, 2022. (Photo by Peter PARKS / AFP)
The Canadian divestiture is expected to close in late 2023.
“HSBC Canada offers the opportunity to add a complementary business and customer base in the market we know best and where we can deliver strong returns and customer value,” RBC President and CEO Dave McKay said in a separate statement.
“This also positions us as the bank of choice for corporate clients with international needs, newcomers to Canada and affluent clients who require global banking and wealth management capabilities.”
China’s Ping An pressured HSBC to spin off its Asian operations to unlock shareholder value amid tensions between Beijing and the West.
© Agence France-Presse