National Bank of Canada and Canadian Imperial Bank of Commerce (CIBC) have quit the race as bidders to acquire the Canadian arm of HSBC bank, The Globe and Mail reported, citing sources.

As per the report, the top banking players in the country held preliminary talks to bid for the London-headquartered bank’s local arm and the first round of bids was due last week.

Bank of Montreal is still among the banks racing to buy HSBC Canada, which could fetch up to C$10bn ($7.35bn) for the British financial services group, the publication said citing a person aware of the discussions.

Representatives for National Bank, CIBC, HSBC and BMO declined to comment on the development.

Earlier this month, HSBC confirmed its plans to sell its Canadian business, a strong commercial banking player with operations in British Columbia and Ontario.

HSBC’s unit will help buyers scale in the Canadian banking market, but the deal faces challenges related to the size of the deal and competition.

CIBC and National Bank were said to have the most compelling strategic reasons to buy the unit, but they would have to raise billions of dollars to fund the deal, the publication said citing analysts.

For National Bank, which has significant operations in Quebec, the deal would have expanded its operations in the Western region.

In CIBC’s case, HSBC Canada would have bolstered its position in the commercial market.

However, a separate source told the publication that CIBC chief executive Victor Dodig is preserving capital in a volatile market and the lender is focusing on organic growth.