HSBC Holdings plc announced on Tuesday that it is selling HSBC Canada to the Royal Bank of Canada (RBC) in a deal worth $10.1 billion. RBC will also acquire the preferred shares and the outstanding debt issued by HSBC Canada for a total of $1.5 billion. The transaction is expected to complete in late 2023.
The deal will result in a pre-tax gain for HSBC of around $5.7 billion. The company still targets a return on average tangible equity of at least 12% from 2023, excluding the gain on this transaction. "Our dividend approach for 2023 and 2024 remains a targeted payout ratio of 50% excluding gains on disposal, and we reiterate our ongoing policy to distribute surplus capital, where appropriate," HSBC added.
HSBC shares jumped 4.40% after the announcement.
