HSBC has agreed to sell its Canadian division to Royal Bank of Canada for US$10.1 billion, the Asia-focused banking giant announced on Tuesday.
The big sale comes after UK-listed HSBC faced calls from its largest shareholder, Ping An Insurance Group, to cut costs and shift more resources to Asia.
HSBC added in a statement that it will use the funds to invest in its core business and return cash to investors.
“We decided to sell after a comprehensive review of the business … and concluded that there was a significant appreciation in value from the sale,” said CEO Noel Quinn.
The Canadian divestment is expected to be completed in late 2023.
“HSBC Canada offers the opportunity to add a complementary client and customer base in a market we know well and where we can offer strong returns and value to customers,” Dave McKay, President and CEO of HSBC Canada, said in a separate statement.
“This also positions us as the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who require global banking and wealth management capabilities.”
China’s Ping An has pressured HSBC to spin off its Asian operations in a bid to unlock shareholder value amid tensions between Beijing and the West.