{"id":1675197,"date":"2022-10-06T05:05:43","date_gmt":"2022-10-06T09:05:43","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1675197"},"modified":"2022-10-06T05:06:28","modified_gmt":"2022-10-06T09:06:28","slug":"analysis-as-british-lender-hsbc-considers-canada-unit-sale-antitrust-issues-loom","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-as-british-lender-hsbc-considers-canada-unit-sale-antitrust-issues-loom\/","title":{"rendered":"Analysis-As British lender HSBC considers Canada unit sale, antitrust issues loom"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fanalysis-as-british-lender-hsbc-considers-canada-unit-sale-antitrust-issues-loom%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1675197&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Divya Rajagopal<\/p>\n<p>TORONTO (Reuters) \u2013     As British lender HSBC Plc explores a potential sale of its Canadian unit, lawyers and analysts say the country\u2019s concentrated banking market could discourage big domestic banks from bidding as the government has charged the antitrust regulator to push for more competition. <\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\">\n<\/div>\n<p>An HSBC deal would be the first big banking sale in a decade in Canada, one of the world\u2019s most concentrated markets where the top six banks control about 80% of total assets, according to Reuters calculations, about double the saturation of the United States where the top five banks control 40%.<\/p>\n<p>The market is so saturated that Canadian banks are expanding overseas to reduce their exposure and the Competition Bureau Canada was granted more powers to prevent further concentration. <\/p>\n<p>The most likely bidders who would have the least trouble with antitrust regulators are smaller Canadian banks, analysts said, while a sale to a Chinese bank would not have antitrust problems but could be scuttled by national security concerns.<\/p>\n<p>Reuters reported on Tuesday that HSBC has tapped JPMorgan Chase to handle a potential sale of Canada\u2019s seventh biggest lender by assets to beef up the parent bank\u2019s returns as demanded by its largest shareholder.<\/p>\n<p>HSBC\u2019s Canadian unit could be valued around C$8 billion  ($5.9 billion) to C$10 billion ($7.4 billion), analysts estimate. It generated C$952 million of pre-tax profit in 2021, according to its annual report. <\/p>\n<p>The universe of potential buyers could already be small since some large Canadian lenders, including Toronto Dominion Bank, and Bank of Montreal are in the middle of buying assets in the United States, said James Shannan, senior equity analyst with Edward Jones.<\/p>\n<p>\u201cNo banks in Canada seem to be likely candidates for this deal,\u201d Shannan said. He ruled out any bids by U.S.-based banks, saying they have been unsuccessful in expanding in Canada due to high disclosure and capital adequacy requirements.<\/p>\n<p>He said Royal Bank of Canada, the country\u2019s biggest lender, has the capacity to do the deal but might not be attracted by HSBC\u2019s business mix.<\/p>\n<p>Gabriel Dechaine, a banking analyst with National Bank of Canada said in a note that regulatory hurdles will be even higher for RBC than other Canadian banks, although all would face competition issues.<\/p>\n<p>RBC declined to comment, while TD and BMO did not respond to Reuters request for comment.<\/p>\n<p>CHINESE BIDDER?<\/p>\n<p>Smaller lenders such as National Bank of Canada and some Chinese suitors are likely to show interest, analysts said.<\/p>\n<p>Keefe, Bruyette &#038; Woods said in a research note that HSBC\u2019s footprint in western Canada could give an instant diversification to Montreal-based National Bank. <\/p>\n<p>National Bank, which has a market value of C$30.1 billion, declined to comment.<\/p>\n<p>Dechaine said HSBC\u2019s business could be attractive for a large Chinese bank. But national security issues could complicate the process.<\/p>\n<p>\u201cPossibly, the federal government would be concerned about whether acquisition of HSBC Canada by a Chinese-controlled buyer would enable the Chinese government to have access to the Canadian banking system,\u201d said John F. Clifford, CEO McMillan LLP.<\/p>\n<p>\u201cI can easily envision the federal government taking a very deep dive to assess the potential security and public interest concerns.\u201d<\/p>\n<p>HSBC Bank Canada is the biggest international player in Canada, with commercial banking, personal banking, investment banking and markets services businesses. Still, its $120 billion assets in Canada are much smaller than those of National Bank, Canada\u2019s sixth largest, with assets of C$387 billion. <\/p>\n<p>Consumer advocates have long complained about high fees for everyday banking, and would probably oppose further consolidation. The average monthly fee on a Canadian checking account is $11, compared with $7 in the United States, according to a Reuters analysis that excluded student accounts.<\/p>\n<p>The Competition Bureau Canada said in an email to Reuters that if the federal ministry of finance in public interest certifies a banking merger, there will not be any scope for litigation.<\/p>\n<p>In 1998, the government of Canada blocked RBC\u2019s proposed acquisition of BMO, and TD and CIBC merger on grounds that the deal would lead to an unacceptable concentration of economic power. <\/p>\n<p>Since then the only sizeable banking deal to be approved was Scotiabank\u2019s C$3.1 billion purchase of ING Groep\u2019s Canadian online bank in 2012.<\/p>\n<p>Nigel D\u2019Souza, an investment analyst with Veritas Investment Research, said HSBC is unlikely to find a single buyer that can pass antitrust muster.<\/p>\n<p>\u201cSo I think the most likely outcome for the deal to actually get done is for HSBC assets to be broken up and split across several of the larger banks,\u201d he added.<\/p>\n<p>($1 = 1.3507 Canadian dollars)<\/p>\n<p> (Reporting by Divya Rajagopal; Writing by Denny Thomas; Editing by David Gregorio)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/business\/analysis-as-british-lender-hsbc\/attachment\/file-photo-people-pass-by-a-branch-of-hsbc-bank-2\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/10\/tagreuters.com2022binary_LYNXMPEI94111-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI94111-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Divya Rajagopal TORONTO (Reuters) \u2013 As British lender HSBC Plc explores a potential sale of its Canadian unit, lawyers and analysts say the country\u2019s concentrated banking market could discourage<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1675197","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1675197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1675197"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1675197\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1675197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1675197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1675197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}