RBC Bank Looking at Growth Strategies

Reporting by Scott Wolf News Observer

"Everything is on the table," CEO Gordon Nixon told Bloomberg News during an interview in New York on Wednesday. He said acquisitions or a merger with another bank are two ways to "maximize return." He said concerns about bank balance sheets and U.S. banking regulations make it difficult to value potential acquisition targets. Royal Bank's last U.S. purchase was the $1.6 billion takeover of Alabama National Bank in February 2008.

There will be opportunities "for years to come" to buy rival banks and expand the U.S. business, Nixon told Bloomberg."The first thing we're going to do is fix it," Nixon said. The biggest question is whether "that business is going to be as attractive as other opportunities for us to deploy capital."
Royal Bank last year reorganized RBC Bank after the subsidiary began losing money during the recession, hurt by its exposure to real estate and deteriorating commercial loans. That effort included cutting hundreds of jobs and replacing top managers.

RBC Bank is now led by CEO Jim Westlake, a Canadian who took over the top spot from Scott Custer last fall. Westlake didn't directly contradict anything his boss told Bloomberg News, but he said RBC Bank officials are not now discussing the possibility of a sale. "You wouldn't ever want a CEO who wouldn't consider all options," he said in a telephone interview Thursday. "Any conjecture about what we might do is exactly that. We are very focused on building a good bank here."

Westlake spoke from his car at Raleigh-Durham International Airport, where he was waiting to fly to Toronto to visit his bosses at Royal Bank.
To fix RBC Bank, officials have consolidated all the branding across its territories under the RBC Bank name and are working to improve the company's balance sheet and loan portfolio, Westlake said.

RBC Bank, with about 430 branches, now employs 500 people in the Triangle, mostly at its headquarters tower in downtown Raleigh. Company wide, RBC Bank has about 5,000 employees, down from 6,000 a year ago.
Royal Bank entered the U.S. market with its $2.1 billion purchase of Rocky Mount-based Centura Bank in 2001.The company's shares, which have nearly doubled in the past year, rose 53 cents Thursday to close at $58.96.

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