Ottawa, Canada– The Royal Bank of Canada’s (RBC) takeover of banking giant HSBC’s Canadian operations was granted conditional approval on Thursday, more than a year after the $15.5 billion deal was announced.
Canadian Finance Minister Chrystia Freeland said RBC would be required to establish “a new integrated banking center” in Vancouver, eliminate certain transfer fees between the two banks, and “protect” the jobs of HSBC Canada’s 4,000 employees.
Canada’s leading bank will also have to increase its workforce in the Manitoba’s provincial capital Winnipeg, maintain at least 33 HSBC branches and offer C$7 billion ($5.3 billion) in financing for the construction of affordable housing.
“Protecting these jobs, maintaining services to the public and improving access to competitive banking services were at the heart of the government’s decision,” Freeland said in a statement.
RBC has 17 million customers in Canada, the United States and 27 other countries.
HSBC, under pressure from shareholders to refocus on its Asian activities, announced the sale of its Canadian operations to RBC for $13.5 billion in November 2022.
It currently represents less than 2 percent of the Canadian banking sector, with more than 130 branches and around 780,000 retail customers.
The London-headquartered bank, which generates two-thirds of its sales in Asia, said it expected the deal would be completed in the first quarter of 2024.