HSBC completed the sale of its Canadian branch to Royal Bank of Canada (RBC) at the end of last week as it continued its pivot away from underperforming businesses to focus on Asia.

The deal, which attracted the attention of regulators and was confirmed last Friday, will see Canada's largest and seventh-largest lenders merge.

HSBC said the deal will unlock "significant value" for the bank. Completion of the transaction will result in an estimated gain on sale of $4.9bn (£3.9bn) in HSBC's first quarter results.

Due to the gain on sale, HSBC's CET1 ratio, a measure of a bank's resilience, will increase by 0.7 percentage points. The bank is expected to announce a special dividend of 21 cents (16.7p) per share in its results, which will be published at the end of the month.

"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, including through an intended special dividend of $0.21 per share," Noel Quinn, HSBC's chief executive said.

According to some estimates, HSBC has built up a sizable £6bn presence in Canada since the 1980s.

Its Canada branches and offices have opened for business on Monday, April 1, as RBC locations.

(c) 2024 City A.M., source Newspaper