"Keep More Of Canada's Financial Sector Under Canadian Ownership" - Royal Bank Of Canada Cleared To Acquire HSBC's Domestic Arm
Portfolio Pulse from Nabaparna Bhattacharya
Royal Bank of Canada (NYSE:RY) has received approval to acquire HSBC Holdings, Plc.'s (NYSE:HSBC) Canadian unit for C$13.5 billion ($10.2 billion). HSBC expects a pre-tax gain of $5.7 billion and plans a special dividend of $0.21 per share from the sale proceeds in H1 2024. The deal is expected to close in Q1 2024. RBC will create a Global Banking Hub in Vancouver with over 1,000 jobs and provide $7 billion in financing for affordable and sustainable housing in Canada. Additionally, RBC will create 100 new jobs in Winnipeg, Manitoba.
December 26, 2023 | 12:06 pm
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POSITIVE IMPACT
HSBC Holdings is set to gain a pre-tax profit of $5.7 billion from the sale of its Canadian unit to RBC and plans to distribute a special dividend of $0.21 per share in the first half of 2024.
The sale of HSBC's Canadian unit is expected to result in a substantial pre-tax gain, which could be perceived positively by investors. The announcement of a special dividend may also lead to a short-term positive impact on HSBC's stock price.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Royal Bank of Canada's acquisition of HSBC's Canadian unit reinforces its position in the Canadian financial sector and demonstrates its commitment to expanding services and creating jobs in Canada.
The acquisition is likely to be viewed positively as it strengthens RBC's market position in Canada and aligns with national interests of keeping financial services under Canadian ownership. The commitment to create jobs and invest in housing may also be seen favorably by investors.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90