Competition Bureau OKs RBC-HSBC sale, but notes concentration of banking services

The Competition Bureau has approved RBC’s proposed acquisition of HSBC Bank Canada.

The bureau said it found the sale was not likely to result in “substantial lessening or prevention of competition under the Competition Act.”

However, in a report to Finance Minister Chrystia Freeland, the bureau said it found that the banking purchase would result in “a loss of rivalry between Canada’s largest and seventh largest banks.” 

It also noted that financial services markets in Canada are concentrated, that Canada’s five largest banks provide the majority of banking services to Canadians, and highlighted “high barriers to entry and expansion” in many Canadian markets. The bureau found that “conditions in certain markets may facilitate coordinated behaviour among firms.”