National Bank buys HSBC’s advisory business

National Bank of Canada has struck a deal to buy the full service investment advisory business of HSBC Securities (Canada) Inc. for $206 million in cash.

The bank has set aside additional cash “to ensure maximum retention of investment advisors.”

The deal adds significant bulk to National Bank, bringing onboard $14.2 billion in assets under administration, bringing National Bank Financial’s asset base to about $80 billion.

It also adds 120 advisors, in 27 offices spread across the country, bringing NBF’s total advisor headcount to more than 1,060.

“Through this acquisition, we are reaffirming our commitment to grow our wealth management distribution network across Canada,” said National Bank President and Chief Executive Officer, Louis Vachon. “HSBC Securities Full Service Investment Advisory Business, with particular strength outside of Quebec, complements well our existing network.”

National Bank has been working hard lately to expand beyond its Quebec stronghold. Today’s deal furthers that goal, as 70% of the HSBC business is based in Ontario and British Columbia. The bank now expects more than half of NBF’s retail revenues will be generated outside of Quebec.

“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,” said Luc Paiement, executive vice-president, wealth management, co-president and co-CEO of NBF.

HSBC says the proceeds will be reinvested to grow its Canadian banking operations, namely expanding its commercial banking business and investing in its global banking and markets, and retail banking and wealth management businesses.

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.

As part of the deal, HSBC Securities will get access to National Bank’s investment advisory network for equity and debt public offerings, subject to certain terms and conditions.

The transaction is expected to close in December 2011, subject to receipt of necessary regulatory approvals.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.