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"Our market share is in the two per cent category, and the international connectivity of that business is relatively low. So that's why we've given serious thought to an alternative strategy for Canada," said Quinn.

HSBC initially announced the strategic review of its Canadian division in early October, noting that the review was at an early stage.

Quinn said the review process is just beginning, but that the bank felt it right to go through it as buyers may place significantly greater value on the business than it has for HSBC in its profit stream.

Analysts said when the potential sale was first announced that a Big Six Canadian bank was the most likely buyer.

National Bank analyst Gabriel Dechaine said that Royal Bank was the leading candidate as it has the scale to take on what could be a more than $10-billion takeover, noting both TD Bank and BMO are already in the midst of multibillion-dollar takeovers in the U.S.

Mike Rizvanovic, an analyst at Keefe, Bruyette & Woods, estimated a valuation of between $8 billion and $8.5 billion but noted that it could go higher given the target's scarcity value in the Canadian market and if several Canadian banks show interest.

He said National Bank could have the most compelling reason to acquire HSBC Canada because a deal would give "instant, meaningful, geographic diversification" to Western Canada as well as a sizable earnings per share gain, while Royal Bank, the largest Canadian bank by market capitalization, was the only one of the banks that could fully fund a buy with existing capital.

On Tuesday, HSBC Bank Canada reported its highest pre-tax profit on record at $298 million for the third quarter, up from $234 million for the same quarter last year.

Pre-tax profits were heavily concentrated in its commercial division with $195 million, while wealth and personal banking had pre-tax income of $83 million and global banking had $32 million.

Total after tax net income was $219 million for the quarter ending Sept. 30, up from $171 million last year.

"The business has performed well and is performing well," said Quinn. "The management team in Canada have done an excellent job."

This report by °µÍø½ûÇø was first published Oct. 25, 2022.