Request for Information: Royal Bank of Canada / HSBC Bank Canada

May 2023

A Request for Information published by the Bureau identifies the areas of investigation that may benefit from information from market participants and Canadians. It is not a final decision, nor does it present the Bureau’s conclusions about a proposed merger.

The Bureau encourages all those with relevant information to confidentially share their experiences through its online form by June 1, 2023.

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Purpose

The Competition Bureau is issuing a Request for Information to help gather facts for its merger investigation of the proposed acquisition of HSBC Bank Canada by Royal Bank of Canada (RBC).

The Bureau invites affected stakeholders to submit information to assist in its assessment of the potential competitive impacts of the proposed acquisition. This Request for Information identifies areas in which the Bureau is seeking information to advance its investigation. However, the Bureau remains open to considering additional information.

Depending on the volume of information received, the Bureau may not be able to respond to each submission but the information received will be thoroughly reviewed and considered.

About the Competition Bureau

The Competition Bureau is an independent law enforcement agency that investigates business activities such as mergers to determine if they are likely to contravene the Competition Act (the Act).

Under the Act, the Bureau may review any merger or acquisition to determine whether it is likely to result in a substantial lessening or prevention of competition in Canada. To do so, the Bureau conducts a thorough examination of the facts of a transaction before arriving at an evidence-based conclusion. The final determination of whether a merger contravenes the Act rests with the Competition Tribunal or the courts.

About the Bureau’s merger review process

The Bureau collects information from a wide range of sources to determine whether a merger raises serious competition concerns. Based on its analysis of the evidence collected, when the Bureau concludes that a merger will likely cause harm to competition, it may seek a remedy or it may apply to the Competition Tribunal for an order to prevent, dissolve, or alter the merger.

It is difficult to determine how long a particular merger review will take to complete. The Bureau must evaluate the steps to be taken on a case-by-case basis. In all cases, the Bureau works with merging parties to complete its reviews as expeditiously as possible.

The Bureau is required by law to conduct its work confidentially and therefore cannot share information regarding the status of its merger reviews.

About public Requests for Information

The Bureau contacts a broad sample of market participants as part of all complex merger investigations; however, it will not always be practical or possible to contact a full set of affected stakeholders through proactive outreach. A public Request for Information provides an opportunity for such affected stakeholders to provide information to advance the Bureau’s examination of the facts relating to its investigation.

About the Bureau’s review of the RBC/HSBC Canada merger

On November 29, 2022, RBC announced its intention to acquire HSBC Canada. RBC is a Canadian banking and financial services company that provides financial services to customers including individuals, businesses, and institutions in Canada and globally. HSBC Canada, an indirect subsidiary of HSBC Holdings plc, is a chartered bank that provides financial services to individuals, businesses, and institutions in Canada and globally.

The Bureau is investigating whether the proposed acquisition is likely to result in a substantial lessening or prevention of competition for services provided by the companies, including personal and business financial services across Canada.

The Bureau’s investigation of the proposed acquisition is ongoing and no conclusions have been reached at this time.

Overview of the topics on which the Bureau is seeking information

The Bureau is seeking information about the following types of personal and business financial services across Canada:

Overview of the topics on which the Bureau is seeking information
Personal Financial Services Business Financial Services
Residential Mortgages Business Accounts
Consumer Lending Other Than Residential Mortgages Business Lending
Personal Transaction Accounts  
Personal Short-term Savings  
Personal Long-Term Investment Services  
Private Investment Counselling Services  

The type of information requested about competition for these products and services includes:

  • rivalry among RBC and HSBC and with other companies
  • impacts of entry or expansion on price, quality, or choice
  • differences in price, quality, or choice among urban, suburban and rural communities
  • differences in price, quality, or choice available to different consumer groups
  • ease of switching service providers
  • the prevalence and impact of bundling more than one product or service with a single service provider

More specifics about the information requested for each product and service is set out below.

Personal Financial Services

Residential Mortgages

RBC and HSBC Canada both provide residential mortgages to individual customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to residential mortgages:

  1. The impact of the proposed acquisition on fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, or any other variable on which mortgage lenders compete.
  2. How and how much each of RBC and HSBC Canada react to each other and to other mortgage lenders (including mortgage brokers, banks, credit unions, mortgage finance companies, other financial institutions and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from these or other providers.
  3. The impact of recent entry or expansion by any mortgage lender in Canada on fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher fees, lower interest rates, reduced options or quality of services for residential mortgages on particular groups of consumers (e.g. low income Canadians, specific genders, racialized persons, new immigrants, self-employed individuals, Canadians in rural areas).
  6. The ease or difficulty of switching financial institutions when entering or renewing a mortgage, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent to which residential mortgage customers who also have other personal or business financial services with the same financial institution are able to leverage their mortgage business to access favourable terms for other personal or business financial services.

Consumer Lending Other Than Residential Mortgages

RBC and HSBC Canada both provide consumer lending services in the form of personal loans (this includes auto loans), and personal lines of credit (this includes home equity lines of credit (HELOC)), to individual customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for consumer lending:

  1. The impact of the proposed acquisition on fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada reacts to each other and to other lenders (including banks, credit unions, specialized lenders, other financial institutions and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any lender in Canada on fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, account features, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher fees, lower interest rates, reduced options or quality of services for consumer lending on particular groups of consumers (e.g. low income Canadians, specific genders, racialized persons, new immigrants, self-employed individuals, Canadians in rural areas).
  6. The ease or difficulty of switching financial institutions where consumer lending products are held, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent to which consumer lending customers who also have other personal or business financial services with the same financial institution are able to leverage their consumer lending business to access favorable terms for other personal or business financial services.

Personal Transaction Accounts

Both RBC and HSBC Canada provide personal transaction accounts, which include chequing and savings accounts, to individual customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for personal transaction accounts:

  1. The impact of the proposed acquisition on fees, interest rates, account features, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada reacts to each other and to other providers (including banks, credit unions, other financial institutions and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, account features, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any provider in Canada on fees, interest rates, account features, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, account features, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher fees, lower interest rates, reduced options or quality of services for personal transaction accounts on particular groups of consumers (e.g. low income Canadians, specific genders, racialized persons, new immigrants, self-employed individuals, Canadians in rural areas).
  6. The ease or difficulty of switching financial institutions where personal transaction accounts are held, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent to which personal transaction account customers who also have other personal or business financial services with the same financial institution are able to leverage their personal account business to access favorable terms for other personal or business financial services. This includes examples where consumers typically acquire multiple financial services from a single financial institution, as well as examples of financial institutions offering incentives to bundle.

Personal Short-Term Savings

RBC and HSBC Canada both provide personal short-term savings products, which include guaranteed investment certificates (“GICs”), term deposits, money market mutual funds, savings bonds, and treasury bills, to individual customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for personal short-term savings:

  1. The impact of the proposed acquisition on fees, interest rates, product features, available terms, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada reacts to each other and to other providers (including banks, credit unions, other financial institutions and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any provider in Canada on fees, interest rates, product features, available terms, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, product features, available terms, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher fees, lower interest rates, reduced options or quality of services for personal short-term savings on particular groups of consumers (e.g. low income Canadians, specific genders, racialized persons, new immigrants, self-employed individuals, Canadians in rural areas).
  6. The ease or difficulty of switching financial institutions where personal short-term savings are held, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent of customers’ substitution between personal short-term savings and other personal financial services, including savings accounts and long-term savings.
  8. The extent to which personal short-term savings customers who also have other personal or business financial services with the same financial institution are able to leverage their short-term savings business to access favorable terms for other personal or business financial services. This includes examples where consumers typically acquire multiple financial services from a single financial institution, as well as examples of financial institutions offering incentives to bundle.

Personal Long-Term Investment Services

RBC and HSBC Canada both provide personal long-term investment services, which include mutual funds and exchange traded funds (“ETFs”), to individual customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for personal long-term investment services:

  1. The impact of the proposed acquisition on fees, interest rates, product features, available terms, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada reacts to each other and to other providers (including banks, credit unions, other financial institutions, wealth management service providers and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any provider in Canada on fees, interest rates, product features, available terms, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, product features, available terms, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher fees, lower interest rates, reduced options or quality of services for personal long-term investment services on particular groups of consumers (e.g. low income Canadians, specific genders, racialized persons, new immigrants, self-employed individuals, Canadians in rural areas).
  6. The ease or difficulty of switching financial institutions providing personal long-term investment services, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent of customers’ substitution between personal long-term investment services and other personal financial services, including savings accounts, short-term savings, and online and discount brokerage services.
  8. The extent to which personal long-term investment services customers also have other personal or business financial services with the same financial institution or are able to leverage their long-term investment business to access favorable terms for other personal or business financial services. This includes examples where consumers typically acquire multiple financial services from a single financial institution, as well as examples of financial institutions offering incentives to bundle.

Private Investment Counselling Services

RBC and HSBC Canada both provide private investment counselling services to individual customers. Private investment counselling services include the provision of portfolio management services to individuals where advisors invest client assets in securities. Private investment counselling services do not include full-service brokerage services.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for private investment counselling services:

  1. The impact of the proposed acquisition on fees, interest rates, product features, available terms, quality of service, customer qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada reacts to each other and to other providers (including banks, credit unions, financial institutions, wealth management service providers and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, customer qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any provider in Canada fees, interest rates, product features, available terms, quality of service, customer qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher fees, lower interest rates, reduced options or quality of services for private investment counselling services on particular groups of consumers (e.g. low income Canadians, specific genders, racialized persons, new immigrants, self-employed individuals, Canadians in rural areas).
  6. The ease or difficulty of switching financial institutions providing private investment counselling services, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent of customers’ substitution between private investment counselling services and other personal financial services, including online and discount brokerage services and personal long-term investment services.
  8. The extent to which private investment counselling services customers who also have other personal or business financial services with the same financial institution are able to leverage their private investment counselling business to access favorable terms for other personal or business financial services. This includes examples where consumers typically acquire multiple financial services from a single financial institution, as well as examples of financial institutions offering incentives to bundle.

Business Financial Services

Business Accounts

RBC and HSBC Canada compete directly to provide business accounts to a variety of sizes and types of business customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for business accounts:

  1. The impact of the proposed acquisition on fees, interest rates, account features, quality of service, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada reacts to each other and to other providers (including banks, credit unions, financial institutions and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, customer qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any provider in Canada on fees, interest rates, product features, available terms, quality of service, customer qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete.
  4. Any variation in fees, interest rates, account features, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher prices, reduced options, or quality of services for business accounts on particular types of businesses (e.g. specific sectors, small and medium enterprises, large businesses, corporate businesses, international businesses, etc.).
  6. The ease or difficulty of switching financial institutions where business accounts are held, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent to which business account customers also have other business or personal financial services with the same financial institution or are able to leverage their business accounts to access favorable terms for other business or personal financial services. This includes examples where consumers typically acquire multiple financial services from a single financial institution, as well as examples of financial institutions offering incentives to bundle.

Business Lending

RBC and HSBC Canada compete directly to provide business lending, which includes operating lines of credit, commercial mortgages, and term loans, to a variety of sizes and types of business customers across Canada.

The Bureau seeks information from affected stakeholders on the following topics, as they relate to the provision of and competition for business lending:

  1. The impact of the proposed acquisition on fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete.
  2. How and how much each of RBC and HSBC Canada react to each other and to other providers (including domestic banks, foreign banks, credit unions, specialized lenders, other financial institutions and non-bank financial intermediaries or Fintechs) in terms of changes to fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, foreign currency features or rates, or any other variable on which providers compete. This includes examples where rates or other terms of service are negotiated with RBC or HSBC Canada using offers from the other or from other providers.
  3. The impact of recent entry or expansion by any financial institution on fees, interest rates, product features, available terms, quality of service, borrower qualification and approval process, promotions, foreign currency features or rates, or any other variable in Canada on which providers compete.
  4. Any variation in fees, interest rates, account features, quality of service, product offerings, and promotions among urban, suburban and rural communities in Canada.
  5. Any differential impacts of higher prices, reduced options, or quality of services for business lending on particular types of businesses (e.g. specific sectors, small and medium enterprises, large businesses, corporate businesses, international businesses, etc.).
  6. The ease or difficulty of switching financial institutions providing business lending services, including real examples describing the reasons for switching and the steps taken to complete the switch.
  7. The extent to which business lending customers also have other business or personal financial services with the same financial institution or are able to leverage their business lending services to access favorable terms for other business or personal financial services. This includes examples where consumers typically acquire multiple financial services from a single financial institution, as well as examples of financial institutions offering incentives to bundle.

How to make a submission to the Bureau

The Bureau encourages all those with relevant information to confidentially share their experiences through its online form by June 1, 2023.

Please provide information requested in all relevant fields of the form, including all necessary rationale and supporting evidence.

Any information provided to the Bureau is treated as confidential as required under section 29 of the Act. For more information on the Bureau’s confidentiality obligations, you may consult its information bulletin on the communication of confidential information under the Competition Act.

How to contact the Bureau

Anyone wishing to obtain additional information about the Bureau and its mandate, or to file a complaint, should contact the Bureau's Information Centre.

Address

Information Centre
Competition Bureau
50 Victoria Street
Gatineau, Quebec
K1A 0C9

Telephone

Toll-free: 1-800-348-5358
National Capital Region: 819-997-4282
TTY (for hearing impaired) 1-866-694-8389

Facsimile

819-997-0324

For media enquiries:

Email: media-cb-bc@cb-bc.gc.ca

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