HSBC to sell Canadian business to RBC in $13.5bn deal

HSBC shot higher on Tuesday after agreeing to sell its Canadian business to Royal Bank of Canada in a $13.5bn cash deal.

Thee transaction, which is expected to close late next year, will unlock "significant value" for the group, HSBC said.

Chief executive Noel Quinn said: "We decided to sell following a thorough review of the business, which assessed its relative market position within the Canadian market and its strategic fit within the HSBC portfolio, and concluded that there was a material value upside from selling the business.

"I am pleased that we have reached an agreement with RBC. The deal makes strategic sense for both parties, and RBC will take the business to the next level. We look forward to working closely with RBC's leadership team to ensure a smooth transition for our clients and colleagues. Our group strategy is unchanged, and closing this transaction will free up additional capital to invest in growing our core businesses and to return to shareholders."

At 1140 GMT, HSBC shares were up 4.6% at 510.90p.