Royal Bank of Canada (RBC) is looking to complete a mega deal by purchasing HSBC Canada, who has 130 branches and 4,200 full time employees in Canada servicing some 780,000 customers. This massive deal can come out to $13.5 billion CAD. There are going to be a lot of hurdles along the way before this gets finalized. But if it has been announced in the news, it usually means that it is moving along.
RBC is already considered one of the top two largest banks in Canada. For them to take over HBSC, it would launch RBC to a whole other level. The Competition Bureau Canada should have their hands full? Or are they encouraging this?
I’m torn by this news. On the one hand, I would love to see a very strong Canadian bank that competes with other massive banks worldwide. I always like to see strong Canadian companies perform well on a global scale. I just hope that it does not come at the expense of the consumer. The big 5 Canadian banks (RBC, TD, Scotiabank, BMO and CIBC) already control the majority of the Canadian market, making us feel like we have little options. Having more competition would be preferable as a consumer.
In a way, I would have preferred to see two smaller banks merging to be able to compete with the big 5 instead.
On a side note, RBC Avion and HSBC Rewards already a few things in common, such as offering a transferrable points program. Furthermore, both financial institutions already have partnerships with British Airways Executive and Cathay Pacific Asia Miles. I’m not sure how much of a role that may have played in this potential merger, but it does simplify some things for them as they move forward.
What are your thoughts on this merger? Please let us know in the comment section below!