April 18th, 2024

RBC to close 25 HSBC locations, convert others once takeover closes next week

By Tara Deschamps, The Canadian Press on March 21, 2024.

Royal Bank of Canada signage is pictured in the financial district in Toronto, Friday, Sept. 8, 2023. Royal Bank of Canada is planning to turn its soon-to-be-acquired HSBC Bank Canada properties into RBC locations immediately after taking ownership.THE CANADIAN PRESS/Andrew Lahodynskyj

TORONTO – Royal Bank of Canada says it will be closing 25 HSBC Bank Canada branches and rebranding dozens more after its takeover deal closes next week.

RBC spokesperson Christine Stewart said the closures are part of the company’s “process of optimizing our branch network in a way that makes the most sense for our clients and our business.”

Some of the shuttering HSBC locations are near RBC branches, she added in an email that said clients were notified about the changes in early March.

The closures come as RBC is also preparing to turn its soon-to-be-acquired HSBC properties into RBC locations on March 28, the same day its $13.5-billion takeover deal will close, if it clears customary conditions.

Branches and offices being converted into RBC locations will reopen on April 1.

The brick-and-mortar transformation that will take shape at HSBC is one of the earliest manifestations of the expansion of RBC’s empire.

RBC announced plans to purchase HSBC Bank Canada in November 2022. At the time, HSBC had about 800,000 clients, 130 branches, 4,200 employees and two per cent market share.

It also counted $130 billion in assets, making it the seventh largest bank in the country.

Despite being a minor player in comparison to some of the larger banks, experts predicted the deal could have a negative impact on consumer choice because HSBC often undercut its rivals on borrowing costs.

Other, larger banks offered fixed and variable mortgage rates that were 20 to 80-plus basis points higher than HSBC, mortgage strategist Robert McLister said in December 2023.

“They were an everyday low-price lender, which is extremely valuable in the Canadian market,” he said.

While it will take some time to get a fuller picture of how the takeover will impact consumers in the long term, many HSBC customers are already being affected by the deal.

In advance of the branch and office conversion, HSBC told its customers their products, services and balances would be automatically migrated over to similar offerings and accounts from RBC.

HSBC customers were also told they will receive new RBC credit cards in March and see their historical banking and credit card statements and documents migrated to RBC accounts.

They were encouraged to download investment documents, which they were told may not be available online after the migration.

“Ensuring that clients continue to receive exceptional advice and service is our highest priority,” RBC’s Stewart said in an email.

– with files from Ian Bickis and Sammy Hudes in Toronto.

This report by The Canadian Press was first published March 21, 2024.

Companies in this story: (TSX:RY)

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