Yes, please! The Competition Bureau gave the go-ahead last month for the proposed merger of the Royal Bank of Canada and HSBC Bank. However, the Trudeau administration, headed by Conservative Party member Pierre Poilievre, is now urging, “Hold up, let’s reconsider this merger.”
The official opposition’s leader argues that in order to lower borrowing rates for people, the Conservatives seek competition among Canada’s financial institutions.
In a statement made public on Friday, Mr. Poilievre stated: “Our banking industry is highly consolidated and is subsidized by the government, which already provides too few firms with too much power. Canadian banks must compete for clients rather than simply buy them.
There is no chance of ever seeing more competition in the Canadian banking industry if the country’s largest banks just buy up emerging competitors.
In comparison to Royal Bank, Mr. Poilievre asserts that HSBC Bank offered more favorable rates. In his view, Chrystia Freeland, the minister of finance, has the authority to block this merger, which, in his words, “allows Canada’s largest bank to acquire over 800,000 customers without having to pay them anything in exchange for their customers.
The Competition Bureau stated that even if the planned merger resulted in the largest bank in Canada acquiring the seventh-largest bank in terms of assets, it was unlikely to materially lessen competition.
According to the Bureau, if the takeover occurs, it will eliminate a rival in a highly competitive market. The finance minister and the banking regulator must yet approve it before it can go into effect, though. The company also stated that for some consumer segments, such as mortgage buyers, there would be less competition between Royale and HSBC Canada.
Last November, the Royal Bank first disclosed its intention to pay $13.5 billion to acquire HSBC Canada. The transaction is anticipated to close in the first quarter of 2024, according to HSBC Canada.