UPGRADE 1-RBC eyes more U.S. expansion after City National deal

* Would consider little acquisitions to speed up growth * CEO states main method is to grow naturally * Sees City National profit more than doubling by 2020

( Adds remarks from RBC CFO on teleconference) By Matt Scuffham TORONTO, June 17 Royal Bank of Canada
plans more expansion in the United States following its $5.
billion acquisition of Los Angeles-based City National in.
November, President Dave McKay stated on Friday. McKay said obtaining City National gave the bank an.
” enormous chance” to grow in the U.S. and it could look at.
further acquisitions to supplement organic growth.

” We would consider tactical choices to make little.
acquisitions that could assist accelerate growth in the United.
States and supply a good payback to shareholders in a.
affordable period of time,” he said. RBC sees the United States as a crucial development market, offering.
opportunities to expand its wealth management and capital.
markets companies at a much faster rate than in Canada, where it.
already has a dominant position. “We have actually purchased the California economy, which is the.
size of the Canadian economy, so there’s huge chance to.
grow here and plainly natural chance to expand into other.
cities utilizing RBC’s wealth management and capital markets.
strength to take City National there,” he stated.

The purchase of City National, referred to as Los Angeles’ “bank.
to the stars” because of its ties to the movie market and.
stars, gave RBC a chance to gain access to high net-worth.
clients in the United States. RBC Chief Financial Policeman Janice Fukakusa informed investors.
on a conference call on Friday that the bank expects City.
National to more than double its pre-tax earnings to over $1.
billion by 2020, and said overall combination costs from the.
merger are anticipated to be between $130 million and $150 million,.
25 percent to 30 percent less than initially anticipated.

The deal allows RBC to supply financial investment banking services.
to City National’s business, private banking and.
entrepreneurial consumers and City National to offer wealth.
management services to RBC customers. “We see lots of opportunities to drive profits development consisting of.
cross-selling City National’s products to RBC’s clients and vice.
versa,” Fukakusa stated. City National’s Chief Executive Russell Goldsmith said in an.
interview that the bank had prevented having to shed key.
customer-facing personnel through the merger, permitting it to focus.
rather on continuing to drive earnings development. “Everything we’ve seen has actually been very encouraging as to the.
capability of RBC in the United States working with City National.
to grow. We’re seeing a lot of opportunities. Their capital.
markets company is extremely strong in media, home entertainment,.
health care, innovation; all areas where we’re working,” he said. (Reporting by Matt Scuffham; Modifying by Alan Crosby).

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *