Competition Bureau issues report summarizing its competition assessment of RBC’s proposed acquisition of HSBC Canada

GATINEAU — The Competition Bureau has issued its findings regarding the potential competitive effects of Royal Bank of Canada’s (RBC) proposed acquisition of HSBC Bank Canada. The Bureau’s conclusions are outlined in a report delivered to the Minister of Finance.

Following a comprehensive review, the Bureau determined that the proposed merger is not likely to result in a substantial lessening or prevention of competition under the Competition Act.

Nonetheless, the Bureau found that it would result in a loss of rivalry between Canada’s largest and seventh largest banks. In addition, the Bureau found that:

• relevant financial services markets remain concentrated, with Canada’s five largest banks accounting for the vast majority of services provided to Canadians;
• there are high barriers to entry and expansion in many of these markets; and
  conditions in certain markets may facilitate coordinated behaviour among firms.
• The Bureau’s report was produced to inform the Minister of Finance’s ongoing review of the proposed transaction. The Bank Act stipulates that all mergers in Canada’s banking sector are subject to the approval of the Minister.

The Bureau’s assessment considered a broad range of sources of information, including over 1500 submissions from Canadians in response to the Bureau’s public request for information issued on May 1.