REG - Royal Bank of Canada - Press Release

Royal Bank of CanadaAnnouncement

22/12/2023 08:15

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RNS Number : 7091X  Royal Bank of Canada  22 December 2023

 

 

 

 

 

 

 

 

 

 

RBC receives approval to proceed with acquisition of HSBC Canada

 

·    Finance Minister approves RBC's acquisition of HSBC Canada; Historic
transaction keeps more of Canada's banking sector in Canadian hands

·    Acquisition to position RBC as the bank of choice for
globally-connected clients

 

TORONTO, December 21, 2023 - Royal Bank of Canada ("RY" on TSX and NYSE)
("RBC") today welcomed the federal Minister of Finance's approval to proceed
with the acquisition of HSBC Bank Canada ("HSBC Canada").

 

"I want to thank the Department of Finance, OSFI, and the Competition Bureau
for their diligent work in reviewing this important acquisition," said Dave
McKay, president and CEO, RBC. "The acquisition of HSBC Canada is good for the
country and Canadians. Not only will this keep more of Canada's financial
sector under Canadian ownership, but it will also allow more Canadians to
access the global economy by combining the strength and scale of RBC with the
international banking capabilities and financial products that HSBC Canada is
known for."

 

With this approval received, RBC and HSBC Canada will work together to
facilitate a smooth transition to RBC for HSBC Canada's clients and employees,
who will receive further information in the coming days regarding what they
can expect as both banks work towards completing the transaction.

 

"By bringing the capabilities, international connections and exceptional
talent of HSBC Canada to RBC, we are creating an enhanced banking experience
for our clients, which includes new international products and innovative
digital capabilities to help them achieve their financial goals," said Neil
McLaughlin, group head, Personal & Commercial Banking, RBC. "At the same
time, HSBC Canada clients will gain access to RBC's award-winning personal,
commercial, wealth and capital markets offerings, while continuing to enjoy a
wide range of international banking services."

 

The acquisition will strengthen RBC's premium domestic business and position
on the global stage.

 

RBC's Commitments to Canadians

RBC today announced significant investments across Canada and particularly in
British Columbia, where many HSBC Canada employees are located.

 

Growing Our Canadian Workforce

·    Over the next five years, RBC will build out a Global Banking Hub in
Vancouver, representing the bank's commitment to making Vancouver a leading
city for financial services. The hub will be supported with over 1,000 jobs
across multiple disciplines including those with technology skills in digital,
data science, and cyber; client-facing, multilingual advisors; fraud experts;
risk managers; and client credit adjudication experts.

·    RBC will increase its client operations and advice centre teams in
Winnipeg, Manitoba, leading to the creation of 100 new jobs.

 

 

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Meeting Community Needs

·    RBC will provide $7 billion in financing for the construction,
retrofitting and renovation of affordable housing(( 1 )) and sustainable
housing in Canada, to be committed over five years. We believe this would
translate into approximately 25,000 housing units. In addition, RBC will begin
offering lending that assists homeowners in redeveloping single family
residences into duplexes, triplexes, multiplexes and laneway homes by June 30,
2024.

 

·    RBC remains committed to donating 1 per cent of its Canadian net
income before tax each year. The addition of HSBC Canada will allow us to
increase our support of Canadians and their communities from coast to coast.

 

·    RBC will commit $5 million over five years to support Manitoba's
agricultural and agri-processing sector, contributing to innovation and
security in Canada's food supply. This builds on RBC's commitment as a
founding member of the Canadian Alliance for Net-Zero Agri-food (CANZA).

 

Ensuring a smooth transition for clients and employees

·    RBC is looking forward to welcoming all employees from HSBC Canada,
enabling their client-facing advisors to continue to serve their existing
clients and deliver exceptional advice and service, and showcasing the
opportunities available at RBC. To allow RBC and incoming HSBC Bank Canada
employees an opportunity to work together, understand talent and skills, and
to explore roles within RBC's organization, RBC will provide continued
employment for HSBC Bank Canada employees(( 2 )) for a minimum period of six
months after the transaction closes.

 

·    RBC remains committed to ensuring clients get significant value,
exceptional service and competitive rates.

 

·    HSBC Canada clients will have access to the largest network of
branches and ATMs in Canada, giving them exceptional convenience in their
everyday banking.

 

·    HSBC Canada clients will have a dedicated toll-free number to call
should they have questions about their transition to RBC. RBC will also
maintain in-branch service in Cantonese and Mandarin as well as offer
Cantonese and Mandarin service in our Advice Centre and through telephone
banking.

 

For more information on this transaction, visit:
https://www.rbc.com/hsbc-canada/ (https://www.rbc.com/hsbc-canada/)

About RBC

Royal Bank of Canada is a global financial institution with a purpose-driven,
principles-led approach to delivering leading performance. Our success comes
from the 94,000+ employees who leverage their imaginations and insights to
bring our vision, values and strategy to life so we can help our clients
thrive and communities prosper. As Canada's biggest bank and one of the
largest in the world, based on market capitalization, we have a diversified
business model with a focus on innovation and providing exceptional
experiences to our more than 17 million clients in Canada, the U.S. and 27
other countries. Learn more at rbc.com (https://www.rbc.com/) .

 

We are proud to support a broad range of community initiatives through
donations, community investments and employee volunteer activities. See how at
rbc.com/community-social-impact (https://www.rbc.com/community-social-impact/)
.

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Caution regarding forward-looking statements

This press release contains forward-looking statements within the meaning of
certain securities laws, including the "safe harbour" provisions of the United
States Private Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation, with respect to RBC's beliefs, plans,
expectations, and estimates. Forward-looking statements in this press release
may include, but are not limited to, statements with respect to the expected
closing of the proposed transaction, plans for the combined operations of RBC
and HSBC Canada, our strategies or future actions, and our objectives and
commitments. The forward-looking information contained in this press release
is presented for the purpose of assisting the holders of our securities and
financial analysts in understanding the proposed transaction and may not be
appropriate for other purposes. Forward looking statements are typically
identified by words such as "believe", "expect", "suggest", "seek", "foresee",
"forecast", "schedule", "anticipate", "intend", "estimate", "goal", "commit",
"target", "objective", "plan", "outlook", "timeline" and "project" and similar
expressions of future or conditional verbs such as "will", "may", "might",
"should", "could", "can" or "would" or negative or grammatical variations
thereof.

 

By their very nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties, both general
and specific in nature, which give rise to the possibility that our
predictions, forecasts, projections, expectations or conclusions will not
prove to be accurate, that our assumptions may not be correct, that our
financial performance, environmental & social or other objectives, vision
and strategic goals will not be achieved, and that our actual results may
differ materially from such predictions, forecasts, projections, expectations
or conclusions.

 

We caution readers not to place undue reliance on our forward-looking
statements as a number of risk factors could cause our actual results to
differ materially from the expectations expressed in such forward-looking
statements. These factors - many of which are beyond our control and the
effects of which can be difficult to predict - include, but are not limited
to: the possibility that the proposed transaction does not close when expected
or at all because of the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of the parties
to terminate the proposed transaction, including because required approvals
and/or other conditions to closing are not received or satisfied on a timely
basis or at all or are received subject to adverse conditions or requirements;
the possibility that the anticipated benefits from the proposed transaction,
such as creating cross-sell opportunities and growing our Canadian operations
are not realized in the time frame anticipated or at all as a result of
changes in general economic and market conditions, interest and exchange
rates, monetary policy, laws and regulations (including changes to capital
requirements) and their enforcement, and the degree of competition in the
geographic and business areas in which RBC and HSBC Canada currently operate;
the risk that any announcements relating to the proposed combination could
have adverse effects on the market price of our shares; the possibility that
the business of RBC and HSBC Canada may not perform as expected or in a manner
consistent with historical performance; the ability to promptly and
effectively integrate HSBC Canada; our ability to cross-sell more products to
customers; reputational risks and the reaction of HSBC Canada's customers and
employees to the transaction; the possibility that the transaction may be more
expensive to complete than anticipated, including as a result of unexpected
factors or events; diversion of management time on transaction-related issues;
material adverse changes in economic and industry conditions; general
competitive, economic, political and market conditions; changes in asset
quality and credit risk; the inability to sustain revenue and earnings growth;
inflation; customer borrowing, repayment, investment and deposit practices;
the impact, extent and timing of technological changes; capital management
activities; and those other factors discussed in the risks sections of our
annual report for the fiscal year ended October 31, 2023 (the 2023 Annual
Report), as such sections may be updated by subsequent quarterly reports, all
of which outline certain key factors and risks that may affect our future
results and our ability to anticipate and successfully manage risks arising
from all of the foregoing factors.

 

We caution that the foregoing list of risk factors is not exhaustive and other
factors could also adversely affect our results. When relying on our
forward-looking statements to make decisions with respect to us, investors and
others should carefully consider the foregoing factors and other uncertainties
and potential events, as well as the inherent uncertainty of forward-looking
statements. Material economic assumptions underlying the forward-looking
statements contained in this press release are set out in the Economic, market
and regulatory review and outlook section and for each business segment under
the Strategic priorities and Outlook sections in our 2023 Annual Report, as
such sections may be updated by subsequent quarterly reports.

 

Any forward-looking statements contained in this document represent the views
of RBC only as of the date hereof. Except as required by law, RBC does not
undertake to update any forward-looking statement, whether written or oral,
that may be made from time to time by us or on our behalf.

 

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For more information, please contact:

Andrew McGrath, RBC Communications

 1  Affordable housing as per municipal and Canada Mortgage and Housing
Corporation definitions.

 

 2  Except for circumstances involving voluntary departures or misconduct.

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