Royal Bank of Canada on Wednesday said it has entered an agreement to acquire HSBC Bank Canada, in a move to position itself as the bank of choice for globally connected clients.
The Toronto-headquartered bank is due to acquire 100% of the common shares of HSBC Bank Canada for an all-cash purchase price of C$13.5 billion, around £8.36 billion. All of the bank’s earnings from June 30 through close will accrue to RBC.
President and Chief Executive Officer of RBC, Dave McKay, said the purchase added a complementary business and client base to its pre-existing platform.
‘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. It will help us better serve global clients looking to invest and grow in Canada,’ McKay said.
At September 30, HSBC Bank Canada had $134 billion in assets, around 130 branches and 4,200 full-time equivalent employees.
In other news, Royal Bank of Canada on Wednesday also released its results for the financial year.
For the twelve months that ended October 31, the bank reported net income of C$3.38 billion, up from C$3.14 billion a year prior.
Meanwhile, diluted earnings per share stood at C$9.61, versus C$8.85 in the previous fiscal year.
The bank said that its ‘excellent performance in all of the business segments’ was driven by revenue growth, which contributed to these increases even with the higher provisions for credit losses that were recorded to reflect a less favourable macroeconomic outlook in the second half of the year.
For the year, the bank reported income before provisions for credit losses and income taxes of C$4.42 billion, a 10% year-over-year increase driven by revenue growth in all of the business segments.
Its CET1 ratio under Basel III was recorded at 12.7%, up from 12.4% the previous year, while its loan book stood at C$206.74 billion, up 13% from C$182.69 billion.
Royal Bank of Canada shares were trading 1.0% lower at C$132.47 in Toronto on Wednesday.
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