The Home of Commons Finance Committee requested Ottawa to reject the Royal Financial institution of Canada’s acquisition of the native unit of HSBC Financial institution for $13.5 billion, citing an absence of competitors within the nation’s monetary sector.
The fee’s report, launched late Wednesday, got here weeks after the Competitors Bureau accepted the deal, paving the way in which for one of many largest offers within the nation’s monetary sector. Nonetheless, the deal has confronted opposition.
The deal, introduced in November 2022, is now within the fingers of the Workplace of the Superintendent of Monetary Establishments (OSFI) and Finance Canada. It’s anticipated to shut within the first quarter of 2024.
“Eradicating competitors within the monetary sector might lead to larger banking charges for Canadians who already pay extra for monetary companies as a result of an already uncompetitive monetary sector,” the committee stated within the report.
Conservative Chief Pierre Poilievre additionally referred to as on the federal authorities to reject the deal, saying blocking the deal is a transparent step the federal government can take to handle affordability issues.
“We strongly imagine that RBC’s proposed acquisition offers HSBC’s Canadian prospects with the very best potential for continuity and stability whereas offering them with revolutionary, made-in-Canada worldwide banking options and superior digital capabilities,” an RBC spokesperson stated.
The Ministry of Finance didn’t instantly reply to a request for remark.
The final time a deal of this dimension was tried in Canada was within the early Nineteen Nineties, when RBC needed to take over rival Financial institution of Montreal. This acquisition has been banned by regulators.
Canada’s extremely regulated banking sector is energetic in mergers and acquisitions as banks on the lookout for development alternatives look to develop in the USA.