Terms and Conditions imposed by the Minister of Finance on the sale of HSBC Bank Canada to the Royal Bank of Canada

On December 21, 2023, the federal government granted the regulatory approval to allow the sale of HSBC Bank Canada (HSBC) to the Royal Bank of Canada (RBC).

Pursuant to the Minister of Finance’s authorities under the Bank Act, she has required RBC to abide by  strict terms and conditions which will protect Canadian consumers and expand consumers’ access to competitive banking services. RBC will also maintain HSBC’s Canadian workforce, create new Canadian jobs, and further support construction of new housing in Canada.

Unless otherwise specified, RBC will do the following for four years, beginning on the closing date of the acquisition:

Protect HSBC’s Workforce and Create New Jobs

• Establish immediately and fully implement within five years a new Global Banking Hub in Vancouver, supporting more than 1,000 jobs and creating about 440 net new jobs in British Columbia, as part of RBC’s effort to secure the future of HSBC’s Canadian workforce and grow British Columbia’s financial sector.
• Increase its client operations centre workforce in Winnipeg by 10 per cent to create 100 new jobs, including for francophone Manitobans.
• Protect HSBC’s Canadian workforce. This includes:
  • Not terminating the employment (except for just cause or mutual parting) of any HSBC employee within six months of the closing date.
  • Not terminating the employment (except for just cause or mutual parting) of all front-line banking and financial advisors at HSBC for at least two years.
  • RBC will not offshore any client-facing, advice centre, or retail back-office positions currently performed by an HSBC employee in Canada, nor will it offshore any existing jobs that would result in “group termination” (as defined by the Canada Labour Code), for at least two years.
• Provide voluntary departure packages for any HSBC employee seeking to leave, where reasonable, within six months of the closing date.

Consumer Banking Services

• Use all reasonable best efforts to service and retain all current HSBC clients.
• Retain and operate as RBC branches, including ATMs within such branches, at least 33 HSBC branches, and transfer HSBC clients to new consolidated branches.
• Provide HSBC clients who continue as RBC clients with access to RBC’s network of ATMs, and ensure that at least 90 per cent of HSBC's existing clients live within 5 km of one or more of RBC’s ATMs on the closing date.
• Maintain equivalent qualifications for fee waivers on all premium chequing accounts for any HSBC clients who continue as RBC clients for 18 months.
• Enable HSBC clients who continue as RBC clients to transfer registered and unregistered products to another financial institution at no cost for 18 months post-transaction. 
• Provide retail deposit account foreign language services, including Mandarin and Cantonese, at HSBC branches that RBC continues to operate as RBC branches and that were providing these services.
• Provide services in RBC’s Advice Centre and through telephone banking services in all foreign languages that were available at HSBC branches. 
• Establish a dedicated toll-free number for HSBC clients whose branch is closing to get more information regarding the closure, reimbursing HSBC clients for the costs of changing to the new RBC branch (including the costs of one order of new cheques), and providing clients with information and advice on how to find alternative services that meet their needs.
• Waive any transfer fees on international money transfers under $50,000 in the RBC mobile application for all HSBC non-business clients that continue as RBC clients, as well as for existing and future RBC non-business clients.
• Within 12 months, expand the foreign currency savings accounts, including the Euro, UK Pound Sterling, and Hong Kong Dollar, to all RBC clients, ensuring the access HSBC clients currently have to some key international currency savings accounts is maintained. These new offerings from RBC will be in addition to the U.S. Dollar account RBC currently offers to its clients and will offer to HSBC clients.

Credit Cards

• Provide information to all HSBC clients about their credit cards at least 60 days before the closing date. Specifically, RBC will inform HSBC clients that:
  • RBC will offer them credit cards that have substantially similar benefits to those that they held with HSBC, including fee structures; and,
  • RBC will convert any HSBC clients’ unused rewards points on the acquisition closing date into RBC rewards points of a substantially similar value.
• Not to interfere with the continued use of credit cards issued by HSBC, including the collection, redemption, or transfer of any rewards points associated with those cards, up until the closing of the acquisition.

Residential Mortgages

• Waive any applicable fees associated with the transfer of mortgage administration from HSBC to RBC, including legal, appraisal, and other service fees.
• Ensure mortgage holders can make informed decisions, including by ensuring employees are trained to proactively and clearly provide information on:
  • The range and characteristics of available mortgage products offered by RBC, based on different borrower circumstances; 
  • Whether special or non-posted rates and other price discretion is available to borrowers; and,
  • Whether mortgage holders can negotiate the interest rate on the basis of demonstrable offers received by other lenders or through mortgage brokers.
• Develop and implement training materials for employees to proactively and clearly disclose to HSBC mortgage holders how the equivalent RBC mortgage product specifically differs from any HSBC residential mortgage products with respect to non-rate features, such as prepayment terms and break fees.

Support Housing Construction in Canada

• Provide $7 billion in financing, of which $2 billion is designated for British Columbia, for the construction, retrofitting, and renovation of affordable housing to build an estimated 25,000 new homes in Canada.
• Provide additional retail lending support, by June 30, 2024, to assist homeowners to redevelop single-family homes into multi-family homes, such as duplexes, triplexes, multiplexes, and laneway homes.
• Publish information in its annual Public Accountability Statement on the value and number of affordable housing units RBC finances, including loans to finance the purchase, refinancing, or construction of purpose-built multi-unit rental properties.

Support Canadian Charities and Food Supply

• Return 1 per cent of all post-HSBC acquisition Canadian profits to Canadian communities and charitable organizations through the RBC Foundation and other means. Based on 2023, this would amount to $127 million in charitable contributions. 
• Provide $5 million over five years to support Manitoba’s agricultural and agri-processing sector, contributing to innovation and security in Canada’s food supply.

Compliance and Reporting

• RBC has agreed to provide the Minister and the Commissioner of the Financial Consumer Agency of Canada (FCAC) with information and reports, including information on RBC’s residential mortgage product offerings.
• RBC will retain an independent third-party auditor, to be approved by and accountable to FCAC, that will monitor and determine if RBC is in compliance with the terms and conditions required by the Minister, and provide its assessments to the Minister of Finance and FCAC in semi-annual reports for the first year, and annual reports thereafter.