HSBC to make multi-billion-pound gain from sale of its Canadian business

HSBC has agreed to sell its business in Canada for C$13.5 billion (£8.4 billion) as it continues a spat with a major investor which wants to break up the global bank.

The banking giant said it has agreed a deal which will see the Royal Bank of Canada (RBC) buying HSBC Canada outright.

It comes a little less than two months since the bank said it was considering a sale of the Canadian arm of the business.

“HSBC Canada is a highperforming and profitable bank, with strong leadership and exceptional people,” said chief executive Noel Quinn.

“I am grateful to the whole team for their hard work in supporting our clients over many years.

“We decided to sell following a thorough review of the business, which assessed its relative market position within the Canadian market and its strategic fit within the HSBC portfolio, and concluded that there was a material value upside from selling the business.”

He said RBC will be able to take the business to “the next level” and he will work with the business to ensure the transition is smooth.

The company expects to make around $5.7 billion (£4.7 billion) in pre-tax gain from the deal.

“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,” Mr Quinn said.

It comes amid pressure from Ping An, a Chinese insurance group which has been calling for the break-up of HSBC.

Ping An’s approximately 8% stake in HSBC makes it a strong voice.

The investor has used this to say “the world’s local bank” would be better if it was a little more local.

The Asian business could prosper on its own away from the millstone of the global business, Ping An has argued.

Shares in HSBC rose around 4% following news of the deal.