FOG BLOG CANADIAN FINANCIAL LOG: RBC BUYS HSBC CANADA FOR 13.5 BILLION DOLLARS!

RBC buying HSBC Canada for $13.5B HSBC has 130 branches and 4,200 full-time equivalent employees in Canada Royal Bank of Canada has agreed to buy the Canadian arm of mutinational bank HSBC for $13.5 billion in cash.

RBC chief executive Dave McKay said the deal offers the opportunity to add a complementary business and client base.

"This also positions us as the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who need global banking and wealth management capabilities," McKay said in a statement Tuesday.

"It will help us better serve global clients looking to invest and grow in Canada." "The deal makes strategic sense for both parties, and RBC will take the business to the next level," HSBC Group chief executive Noel Quinn said in a statement.

"Our group strategy is unchanged, and closing this transaction will free up additional capital to invest in growing our core businesses and to return to shareholders."

The Canadian arm of British-based HSBC has been up for sale this year because the parent company has been facing pressure from its largest shareholder, China's Ping An Insurance Group, to boost returns.

At more than $13 billion, the price tag makes the deal the most expensive one ever for a Canadian bank buying another Canadian-based bank, although the so-called Big Five routinely spend more than that on foreign acquisitions.

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HSBC has had operations in Canada since 1981 and currently has approximately 130 branches, 4,200 employees, serving roughly 780,000 customers in Canada.

According to its most recent quarterly report, HSBC Canada had $125 billion worth of assets as of the end of June, and posted an operating income of more than $1.1 billion in the first half of this year. HSBC has about two per cent of all the bank deposits and mortgages in Canada.