HSBC Canada Sale of Unit Leads to Dividend

HSBC Canada has announced the sale of its insurance unit, which has led to a significant dividend payment for shareholders. The sale was a strategic move to focus on core banking operations and improve profitability.

The sale of the insurance unit generated a substantial profit, which will be distributed to shareholders in the form of a special dividend. This dividend will be in addition to the regular dividend paid out by HSBC Canada.

Shareholders can expect to receive a higher-than-expected dividend payment, thanks to the sale of the insurance unit. This is a welcome surprise for investors who have been waiting for a boost to their returns.

HSBC Canada's decision to sell its insurance unit has paid off in a big way, resulting in a sizeable dividend payment for shareholders.

HSBC completed the sale of its Canadian branch to Royal Bank of Canada (RBC) at the end of last week.

The deal will see Canada's largest and seventh-largest lenders merge, unlocking "significant value" for the bank.

HSBC said the deal will result in an estimated gain on sale of $4.9 billion in its first quarter results.

This gain will increase HSBC's CET1 ratio, a measure of a bank's resilience, by 0.7 percentage points.

HSBC is expected to announce a special dividend of 21 cents (16.7p) per share in its results.

The special dividend will be paid to investors alongside first quarter results at the end of April.

HSBC's CET1 ratio will be enhanced by around 0.7 percentage points reflecting the gain on disposal, the sale of HSBC Canada risk weighted assets and the special dividend.

The sale of HSBC Canada to RBC was a cash deal worth CAD13.5 billion, or USD10.16 billion.

RBC will welcome 4,500 employees and 780,000 clients from HSBC Canada.

RBC committed to creating new jobs in Canada and building a new 'Global Banking Hub' in Vancouver to assuage regulators' concerns.

HSBC is paying a special dividend of 21 cents (16.7p) per share to its shareholders.

This special dividend is a result of the estimated gain on sale of $4.9bn (£3.9bn) from the sale of its Canadian business to Royal Bank of Canada (RBC).

The sale of HSBC Canada will unlock significant value for the bank, and the special dividend is a way for HSBC to reward its loyal shareholders.

The special dividend will be paid alongside HSBC's first quarter results at the end of April.

HSBC's CET1 ratio will increase by 0.7 percentage points due to the gain on sale, which will also enable the bank to grow its core businesses.

HSBC's Chief Executive Noel Quinn said the special dividend is a way to reward shareholders for their loyalty.

The special dividend is a one-time payment and is not part of HSBC's regular dividend payments.