HSBC Holdings PLC on Tuesday said it would pay shareholders a special dividend after completing the sale of its Canadian business.
The Asia-focused lender will make a $0.21 special payout to investors alongside first quarter results at the end of April, it stated, in addition to any proposed interim dividend.
HSBC said the sale of HSBC Bank Canada to Royal Bank of Canada, which was completed last Thursday, would result in an estimated gain on sale of $4.9 billion in the first quarter of 2024.
This is inclusive of the recycling of an estimated $600 million in foreign currency translation reserve losses, HSBC said.
Shares in HSBC rose 1.7% to 629.35 pence in London on Tuesday. RBC closed down 0.4% at C$136.08 in Toronto on Monday.
HSBC said its CET1 ratio would be enhanced by around 0.7 percentage points reflecting the gain on disposal, the sale of HSBC Canada risk weighted assets and the special dividend.
HSBC and RBC had announced the agreement for RBC to acquire HSBC’s Canadian business in November 2022 in a cash deal worth C$13.5 billion, or $10.16 billion.
HSBC Chief Executive Noel Quinn said: ‘Completing this deal is another important milestone in HSBC’s transformation, and it will provide capital that will enable us to grow our core businesses and reward our shareholders for their loyalty.’
Neil McLaughlin, group head, Personal & Commercial Banking, RBC said: ‘RBC’s acquisition of HSBC Canada expands the depth and breadth of our international banking capabilities and builds our ability to connect Canadians to the global economy.’
‘Through this combination, RBC is now exceptionally positioned as the bank of choice for commercial clients with international needs, newcomers to Canada and affluent clients who need global banking and wealth management capabilities,’ McLaughlin commented.
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