On Thursday markets mostly recovered from the little swoon of Wednesday afternoon as the S&P 500 rose 1.0% and Toronto rose 0.8%.
Linamar was up 2.9% after announcing an acquisition.
After the close it was announced that the Canadian Minister of Finance was giving the green light to RBC’s acquisition of HSBC Canada. Conditions included a short moratorium on layoffs and that they must keep 33 branches open for four years.
Canadian Western Bank has designs on luring away some of HSBC’s commercial customers. Those customers presumably like dealing with a smaller bank.
One thing that got little attention is that a lot of immigrants may have used HSBC becasue of its vast international linkages through the parent HSBC. Tough luck I guess. It’s true, RBC also has big international operations but not so much (if any) in terms of retail branches in Europe and Asia.
I was a bit surprised that what I call the Competition (Elimination) Bureau did not object to this decrease in competition. But it’s par for the course for them.
As far as keeping branches open, really bank branches are far less needed these days. I was in CIBC’s main Halifax branch last week ( to get a PIN on a new credit card) and they had one teller open in a cavernous bank hall and only two other customers besides me. Similarly I made a rare visit to a big TD branch yesterday (big downtown branch) to get some physical cash for Christmas and I had zero wait time to see a Teller.
It was the competition from HSBC (lower mortgage rates) that was and is needed. Instead of protecting competition the government is protecting obsolete jobs and obsolete branches (for a short while). Finger in a leaky and failing dike scenario. You can’t stop progress as we used to say – back when people were more sensible.