Royal Bank of Canada (RBC) has again been
linked with a possible sale of its US-based retail banking business
The US-based division of RBC comprises 426
branches, more than $25billion of assets and around 5,000
“At this point in the cycle, I am not sure
what we would like to do in [the US] in the longer term” said
Nixon has in the past said that all options
were on the table as regards its US division, concentrated in the
South-East of the US.
According to Canadian press reports, RBC has
now engaged JPMorgan Chase to explore a possible sale of
the US division. RBC may also consider the possibility of
partnering with a US-headquartered institution.
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RBC’s international division reported a loss
of C$317m ($319.5m) in fiscal 2010, compared with a loss of
C$1.45bn in fiscal 2009.
Although the unit swung back into
the black in the three month period to 31 January – it posted a net
income of C$24m – the profit was derived from RBC’s business unit
in the Caribbean and its RBC Dexia unit.
An outright sale may fetch in the region of
C$2.5bn, little more than one-half of the almost C$5bn invested by
RBC in building up its US division.
US Bank, BB&T and PNC are among US lenders
linked with a possible bid; SunTrust Banks and Regions may also be
mooted as possible bidders but would both face capital raising
International raiders for whom the RBC
business unit might appeal include Spain-based BBVA – its US
operations are headquartered in Alabama – RBC’s Canadian-based
rivals Toronto Dominion and conceivably, Santander.