Proactive Investors - HSBC Holdings PLC (LSE:LON:HSBA) expects the $13.5 billion sale of its Canadian operations to the Royal Bank of Canada (TSX:TSX:RY) (RBC) to close in the first quarter of 2024 after the transaction won the approval of Finance Minister Chrystia Freeland on Thursday, a key final step after the deal got the go-ahead from the Competition Bureau in September.
Per the terms of the transaction, RBC cannot fire any of HSBC Canada’s 4,000 employees within the first six months of the closing date and banking services must continue to be provided at a minimum of 33 HSBC branches.
RBC is also required to establish a new Global Banking Hub in Vancouver, which will support more than 1,000 jobs, increase its client centre workforce in Winnipeg by 10% which will create 100 jobs, and provide $7 billion in funding for the construction of affordable housing across Canada.
“Protecting these jobs, maintaining the services provided to Canadians, and expanding consumers’ access to competitive banking services were central considerations in the government’s decision,” a press release from Freeland’s office said.
HSBC said on Friday that it and RBC continued to progress the transaction.
“We appreciate the thorough and thoughtful approach Canada’s regulators have taken to this sale since the HSBC Group announced its strategic decision to exit the Canadian market, including public consultations and the report by the Competition Bureau," HSBC chief executive Noel Quinn said in a statement.