Royal Bank of Canada plans further expansion in the United States following its $5 billion acquisition of Los Angeles-based City National in November, Chief Executive Dave McKay said on Thursday. McKay said acquiring City National gave the bank an "enormous opportunity" to grow in the United States and the bank could look at further acquisitions to supplement organic growth.
"We would consider strategic options to make small acquisitions that could help accelerate growth in the United States and provide a good payback to shareholders in a reasonable period of time," he said. RBC sees the United States as a key growth market, offering opportunities to expand its wealth management and capital markets businesses at a faster rate than in Canada, where it already has a dominant position.
"We have invested in the California economy which is the size of the Canadian economy so there's enormous opportunity to grow here and clearly organic opportunity to expand into other cities using RBC's wealth management and capital markets strength to take City National there," he said. The purchase of City National, known as Los Angeles' "bank to the stars" because of its ties to the movie industry and celebrities, gave RBC an opportunity to access high net-worth clients in the United States.
The deal also enabled it to cross sell products and services including offering investment banking services to City National's commercial, private banking and entrepreneurial customers. "Everything we've seen in the seven plus-months I think has been very encouraging as to the ability of RBC in the United States working with City National to grow," said City National's Chief Executive Russell Goldsmith.
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