RBC takeover of HSBC Canada unlikely to substantially reduce competition, watchdog finds
Royal Bank of Canada’s proposed acquisition of HSBC’s Canadian business is not likely to result in a substantial lessening or prevention of competition under the Competition Act, the Competition Bureau said in a review of the merger.
In a report issued Sept. 1 to the Minister of Finance, the Bureau outlined its findings regarding the potential competitive effects of the merger, in which the country’s largest bank, RBC, will acquire HSBC, Canada’s seventh-largest bank, based on a measure of total assets.
“While certain evidence indicated that HSBC Canada was a vigorous competitor and a material rival to RBC in the offer of particular financial services, the Bureau found that HSBC Canada’s competitive impact was limited when compared to other financial institutions,” the report said.
The bureau reached the conclusion despite finding that Canada’s financial services markets remain concentrated, with the five largest banks accounting for the vast majority of services provided to Canadians.
RBC announced it had a deal to acquire HSBC Canada for $13.5 billion in cash on Nov. 29, 2022.
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