Toronto
HSBC bank deal: Bank HSBC has agreed to sell its Canadian arm to Royal Bank of Canada (RBC) for $10bn in cash, say Kevin Orland and Harry Wilson on Bloomberg. RBC, Canada’s biggest bank by assets, will gain 130 more branches and a “significant” commercial-banking business with clients in industries that trade and bank internationally. For HSBC, “this transaction is a clear positive”, says Joseph Dickerson of bank Jefferies. By selling its Canadian business, HSBC raises its core capital ratio (a measure of financial strength), freeing up money to hand back to “frustrated” shareholders.
Its biggest shareholder, China’s Ping An Insurance Group, has long complained of poor returns, having urged HSBC to spin off its Asian operations – which HSBC has so far refused to do. On the contrary, this deal would allow HSBC to focus more on its core business in Asia. But HSBC has said it will consider making a one-off dividend payment or stock buyback with
