HSBC Holdings PLC is getting aggressive in Canada — and one needs to look no further than its latest mortgage rate for proof of broader ambitions.
HSBC Canada is offering five-year fixed-term mortgages at 2.39 percent, undercutting the lowest rates at the largest domestic lenders, including Toronto-Dominion Bank and Royal Bank of Canada.
“I want to be more competitive,” Sandra Stuart, chief executive of the Canadian unit of London-based HSBC, said in an interview from her Vancouver office. “I will never be as big as the big five, but I certainly want to have our share of [the] market and I want to be out there with good competitive products.”
The mortgage push is part of Stuart’s strategy to expand HSBC Canada across its main businesses of commercial lending, capital markets, retail banking and wealth management.
Stuart, who became head of the Canadian operations in June 2015, won the backing of HSBC, which she said has made a fourfold increase in annual investment in the Canadian operations to gain market share.
“HSBC globally is making a big bet on Canada and they’re investing in us to do that,” Stuart said. “There’s a handful of priority markets that are going to get continued investment and our job is to develop the strategy, to execute, and of course deliver the returns.”
HSBC has been in Canada since 1981, expanding through takeovers of domestic lenders and the Canadian operations of foreign banks to become the seventh-largest lender in the nation with C$95.7 billion (US$71 billion) in assets.
Commercial banking accounts for 60 percent of the firm’s Canadian profit, while its global banking and markets operations contribute 30 percent, and retail banking and wealth management represent 10 percent.
“Canada is a great place to do business,” Stuart said, citing the nation’s growing economy, geographic stability and international trade ties that dovetail with HSBC’s global reach. “Canada is the No. 2 export partner for the US and we’ve got the gateway to the Pacific, and we’ve got a real focus now on China, a great corridor with Hong Kong.”
The Canadian operations are a “top five” producer of profit before taxes, contributing 7.6 percent of total earnings for Europe’s biggest bank last year, up from 4.4 percent in 2015.
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