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HSBC explores sale of Canadian operations after calls for break-up

HSBC confirmed that it is reviewing the future of its Canadian business  (PA Archive)
HSBC confirmed that it is reviewing the future of its Canadian business (PA Archive)

HSBC is considering selling its Canadian business as it looks to fend off calls from its largest shareholder for a wholesale break-up.

“We are currently reviewing our strategic options with respect to our wholly owned subsidiary in Canada,” the bank said on Tuesday.

The review is at an early stage, with no final decision yet taken, but one option would be a sale of the business’s 100% stake in HSBC Bank Canada.

“HSBC Bank Canada is a very strong business and Canada’s leading international bank,” HSBC added.

China’s Ping An Insurance Group, which owns more than 8% of HSBC, has put the bank under pressure to split off its lucrative Asian business in order to improve profits.

A sale of the Canadian operations would add to a number of divestments HSBC has already made in recent years.

In May 2021, it announced plans to exit mass market banking in the United States, and in June it said it would sell its French retail business, although it remains active in more than 60 countries.

According to HSBC’s website, HSBC Bank Canada is the seventh-largest bank in Canada.

HSBC first opened in Canada in 1981 and made about a dozen acquisitions, including Bank of British Columbia in 1986, to expand its business over time.

Canada was the bank’s second-largest market in the Americas after the United States in 2021, with $58.1 billion in customer deposits at the end of last year.

It also was more profitable than the US business last year, generating $768 million in pre-tax profit.

The review of HSBC’s Canadian operations was first reported by Sky News on Tuesday.