29 March 2006

RBC to 'Reaccelerate' US Footprint in 2007

Canadian Press, 29 March 2006

RBC Financial Group plans to ramp up its presence in the United States - a market that has proved challenging in the past - with 15 to 20 new branches per year starting in 2007, says the head of its American operations.

Scott Custer, CEO of RBC Centura Banks Inc., made the remarks Wednesday during a presentation to a Canadian financial services conference in Montreal.

He said that planned reacceleration, primarily in the Atlanta and Florida markets, would follow "slowed expansion" in 2006 as the bank focuses "on key business development and operational initiatives."

Canada's largest bank, also known as Royal Bank of Canada, had already outlined those expansion plans after opening 10 U.S. branches in 2005 and 18 in 2004.

Royal Bank, however, has previously coped with operational challenges in the United States, with RBC Centura posting "disappointing" earnings in 2004.

That led the bank to exit its U.S. mortgage business - RBC Mortgage Co. - to focus on "high-growth client segments" such as businesses, business owners, professionals and commercial clients.

In 2005, it sold its U.S.-based RBC Mortgage and its 135 branches for an undisclosed price to a subsidiary of real estate trust New Century Financial Corp. of Irvine, Calif., marking its farewell from the cut-throat American national market for mortgage services.

Earlier this month, RBC president and CEO Gordon Nixon acknowledged those challenges when addressing shareholders at the bank's annual meeting, but said that shifted focus has resulted in strong growth of both consumer and commercial loans and deposits, while contributing to a "significant improvement" in RBC Centura's financial performance.