Competition Bureau issues report summarizing its competition assessment of RBC’s proposed acquisition of HSBC Canada

News release

Bureau’s findings will inform the Minister of Finance’s ongoing review of the proposed merger

September 1, 2023 – GATINEAU, QC – Competition Bureau

The Competition Bureau has issued its findings regarding the potential competitive effects of Royal Bank of Canada’s (RBC) proposed acquisition of HSBC Bank Canada. The Bureau’s conclusions are outlined in a report delivered to the Minister of Finance.  

Following a comprehensive review, the Bureau determined that the proposed merger is not likely to result in a substantial lessening or prevention of competition under the Competition Act.

Nonetheless, the Bureau found that it would result in a loss of rivalry between Canada’s largest and seventh largest banks. In addition, the Bureau found that:

  • relevant financial services markets remain concentrated, with Canada’s five largest banks accounting for the vast majority of services provided to Canadians;
  • there are high barriers to entry and expansion in many of these markets; and
  • conditions in certain markets may facilitate coordinated behaviour among firms.

The Bureau’s report was produced to inform the Minister of Finance’s ongoing review of the proposed transaction. The Bank Act stipulates that all mergers in Canada’s banking sector are subject to the approval of the Minister.

The Bureau’s assessment considered a broad range of sources of information, including over 1500 submissions from Canadians in response to the Bureau’s public request for information issued on May 1, 2023.

Quick facts

  • The proposed transaction is also subject to an application process administered by the Office of the Superintendent of Financial Institutions (OSFI).

  • When assessing mergers in the banking sector, the Minister of Finance takes into account all matters she considers relevant, such as the impact of the transaction on the level of competition in the sector.

  • In reviewing mergers, the Bureau considers many different elements, including the level of economic concentration in the relevant industry and the merging parties' market shares.

  • The Bureau’s assessment considered a broad range of sources of information, including:

    • hundreds of thousands of records that include the merging parties’ strategic, marketing, and business planning documents; 
    • submissions, supporting information and expert analysis provided by the merging parties; 
    • detailed data and financial information received from the merging parties and their competitors; and 
    • interviews with stakeholders in the relevant markets, including competing financial institutions, financial intermediaries (such as mortgage brokers), customers, and regulators.
  • The Bureau contacts many market participants as part of all complex merger investigations; however, it will not always be practical or possible to contact a full set of affected stakeholders through proactive outreach. A public Request for Information provides an opportunity to gather facts about the proposed transaction from such affected stakeholders.

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The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. Competition drives lower prices and innovation while fueling economic growth.

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