Royal Bank of Canada has signed a deal to acquire HSBC Bank Canada for $13.5 billion in cash.
RBC chief executive Dave McKay said the deal offers the opportunity to add a complementary business and client base.
"This also positions us 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," MacKay said in a statement Tuesday.
"It will help us better serve global clients looking to invest and grow in Canada."
Global banking giant HSBC Holdings PLC said earlier this year that it was reviewing strategic options for its Canadian subsidiary including the possible sale of the operations.
HSBC Group chief executive Noel Quinn said the bank decided to sell the Canadian business after a thorough review that concluded that there was a material value upside from selling.
"The deal makes strategic sense for both parties, and RBC will take the business to the next level," Quinn said in a statement.
"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."
HSBC Canada has approximately 130 branches and 4,200 full-time equivalent employees.
RBC said it expects to close the deal by late 2023 subject to customary conditions, including regulatory approvals.
Under the agreement, all of HSBC Canada's earnings from June 30, 2022, through to the closing of the deal will accrue to the Canadian bank.