- Deal comes amid pressure from Chinese shareholder
- Analysts hail ‘sensible’ transaction
- Bank could return deal proceeds to shareholders
LONDON/TORONTO/NEW YORK, Nov 29 (Reuters) – HSBC (HSBA.L) has agreed to sell its business in Canada to Royal Bank of Canada (RY.TO) for C$13.5 billion ($10 billion) in cash, paving the way for a potential bumper payout for shareholders later down the line.
The deal will help RBC consolidate its leading position in one of the world’s most concentrated banking markets, where the top six lenders control about 80% of outstanding loans. RBC’s purchase price reflects a 30% premium to the value some analysts had attributed to HSBC’s Canada business. Canadian regulators said they will review the deal.
HSBC, which once billed itself as the world’s local bank and built a global network of retail banking businesses, has in recent years been cutting those back to try to improve profits.
HSBC’s exit from Canada marks…
