National Bank to acquire the Full Service Investment Advisory Business of HSBC Securities (Canada) Inc.
National Bank of Canada (“National Bank” or the “Bank”), through an affiliate, has entered into an agreement with HSBC Bank Canada and certain of its subsidiaries (“HSBC Bank Canada”) pursuant to which National Bank will acquire the full service investment advisory business of HSBC Securities (Canada) Inc. (“HSBC Securities”) and certain assets related to the segregated fund and insurance business of HSBC Insurance Agency (Canada) Inc. (together, the “Full Service Investment Advisory Business”). HSBC Securities’ Full Service Investment Advisory Business has $14.2 billion of assets under administration, managed by over 120 investment advisors located in 27 offices across Canada. The Full Service Investment Advisory Business operates across Canada, with approximately 70% of its business being centered in Ontario and British Columbia.
National Bank has agreed to pay $206 million in cash to HSBC Bank Canada, subject to certain customary adjustments. An additional amount has been set aside to ensure maximum retention of investment advisors. The transaction is expected to increase National Bank’s 2012 and 2013 recurring EPS by $0.03 to $0.05. National Bank estimates the transaction will reduce its Common Equity Tier 1 ratio under Basel III rules by approximately 40 basis points. Closing is expected to occur in December 2011, subject to receipt of necessary regulatory approvals.
The transaction is another major step in implementing National Bank’s strategy to expand across Canada and add scale to its wealth management platform. When combined with the recently completed acquisition of Wellington West, National Bank Financial (“NBF”) will have approximately $80 billion in assets under administration across Canada and over 1,060 investment advisors. More than 50% of NBF’s retail revenues will be generated outside of Quebec.
“Through this acquisition, we are reaffirming our commitment to grow our wealth management distribution network across Canada. HSBC Securities Full Service Investment Advisory Business, with particular strength outside of Quebec, complements well our existing network”, said National Bank President and Chief Executive Officer, Louis Vachon.
Luc Paiement, Executive Vice President, Wealth Management, Co-President and Co-CEO of NBF added “We are pleased to welcome HSBC Securities full service investment advisory clients, investment advisors and employees to our growing family across Canada. Our national wealth management platform will provide them industry leading products and services, delivered by Canada’s leading team of investment professionals. With the additions of the full service investment advisory business of HSBC Securities and Wellington West, we are demonstrating our strong commitment to serving the wealth management needs of investors in every community across Canada." Mr. Paiement added, “With the integration of Wellington West well in hand, we expect a seamless transition of HSBC Securities Full Service Investment Advisory Business on to National Bank's operations platform, where most of these assets are already held.”
As part of the transaction, HSBC Bank Canada will refer clients with non-discretionary full service investment advisory needs to National Bank, and HSBC Bank Canada and National Bank will cooperate to serve the financial needs of mutual clients. The agreement also provides HSBC Securities access to National Bank’s investment advisory network for equity and debt public offerings subject to certain terms and conditions.
About National Bank of Canada
National Bank is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has over $153 billion in assets and, together with its subsidiaries, employs 19,217 people. It was named the strongest bank in North America and ranked third in the world in the June 2011 issue of Bloomberg Markets magazine. The Bank’s securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank’s website at www.nbc.ca. To access National Bank’s financial education portal, visit www.clearfacts.ca.
About National Bank Financial
With annual revenues exceeding $1 billion, National Bank Financial is a fully-integrated investment dealer combining retail advisory and brokerage services with institutional brokerage, investment banking, corporate finance, and securities clearing for third parties. National Bank Financial has 123 branches located across the country, and services more than 300,000 clients. Its Financial Markets division has a major presence in Toronto, Calgary, Vancouver and Montreal, as well as operations in the United States and Europe.
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