HSBC has agreed to sell its Canadian operations to Royal Bank of Canada (RBC) for £8.4 billion, as the London-headquartered bank continues to reduce its global footprint and refocus on the Chinese market. The deal includes more than 130 branches and 780,000 customers.
The sale comes as HSBC navigates political pressures from both Western governments and Beijing, particularly following China's crackdown in Hong Kong. The bank has also faced demands from Chinese activist shareholder Ping An to improve returns, including a potential spin-off of its Asian business.
HSBC's Canadian unit was profitable, earning C$490 million (£301 million) before tax in the first half of the year, unlike its US and French retail operations, which the bank also plans to exit. CEO Noel Quinn stated that the sale followed a review of the business's strategic fit, noting that HSBC had a relatively small share of the Canadian market.
The transaction occurs amid strained Canada-China relations, exacerbated by the 2018 arrest of Huawei CFO Meng Wanzhou in Canada, in which HSBC was accused by Chinese state media of involvement. The bank has also faced Western criticism for its perceived alignment with Chinese authorities during the 2020 Hong Kong protests.
Quinn said the deal would free up capital to invest in core businesses and return to shareholders. The sale is subject to regulatory approvals.
