At this time of the year – it was just prior to the editorial Christmas party more years ago now than I wish to recall – I am apt to recall the parting advice of my predecessor as RBI editor, writes Douglas Blakey
‘Do not touch book reviews and do not do people moves’.
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The first rule, I have broken once, on the occasion of being sent an advance copy of Veronon Hill’s ‘Fans NoCompanies: How to create growth companies in a no growth world.’
I make no apology to my former mentor by breaking the second rule: as people moves go, the promotion of RBI editorial advisory member Dave McKay.
McKay, 50, a former winner of the RBI Retail Banker of the Year, has been group head, personal & commercial banking of RBC since 2008.
From February 2014, McKay will become RBC president and president and CEO effective from 1 August 1, 2014.
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By GlobalDataHis track record in his current role has been outstanding, with RBC maintaining and strengthening its position as number one Canadian bank by market share by every key metric, notwithstanding the strenuous efforts of Toronto Dominion to knock RBC off its perch.
A quick glance back at past interviews McKay has given to RBI, before, during and after the global banking crisis, provides a number of soundbites that highlight the soundness of the bank’s Canadian strategy under his leadership.
For example: In 2009 – a time when many banks were unwilling or unable to make the right investment, a bullish McKay said:
"This is a time to accelerate our investment; expand our mobile sales force, expand our ATM network and grow our online capability."
In an earlier memorable interview, at the height of the crisis, as banks slashed rewards programmes for customers as part of urgent cost-cutting strategies, McKay announced the expansion of RBC’s highly successful Rewards loyalty programme to all consumer banking product categories, not just credit cards.
On another occasion, after reporting yet another record set of results for RBC in Canada, he told me:
"We cannot afford to be complacent. There is always a healthy dose of paranoia here, starting with me."
In as few words as I can McKay pulled off a notable hat-trick: he got the bank’s risk strategy right – a spell spent in the bank’s risk management unit certainly helped in that regard.
The bank’s digital strategy has been spot on, anticipating the changing way in which customers prefer to bank and make payments and thirdly he has grown mortgage earnings and market share, without the cost-incurring expense of utilising mortgage brokers.
McKay’s elevation to the senior role at RBC brings off another notable hat-trick: the third major universal bank to appoint as CEO a banker most associated with retail banking, following the appointments of Ross McEwan and Anthony Jenkins at RBS and Barclays respectively.
2013: a mediocre year for banking M&A
Looking back on the past 12 months, it has been a fairly modest, read unexciting year, for banking sector M&A.
It is not a year that will linger long in the memory.
Analysts summarise this succinctly: pre-crash, banking CEO’s were criticised as over-cautious if they did not make an acquisition; by 2013 the opposite is true.
In the US, deal activity has slowed, pricing has seemingly improved. But 2013 has not witnessed any deal on a par with Capital One’s 2011 $9bn acquisition of ING US or last year’s near $3.8bn acquisition of Hudson City by M&T.
