Royal Bank of Canada (RBC) is looking to grow its North American and European presence as it targets both organic and inorganic expansion.
Chief executive Dave McKay said during a conference call on 10 January 2022 that the firm’s primary growth mechanism will be organic for the more “capital-intensive businesses”, such as commercial, corporate banking and credit cards.
But for wealth distribution, RBC is eyeing the inorganic route to provide “accretive growth to our shareholders”, McKay said.
The bank also said that it wants to grow its US and Europe wealth management and distribution operations.
Additionally, for Europe, it intends to grow its global wealth franchise, while for the US, it aims to expand its commercial business.
‘Opportunities are significant’
McKay added: “We are not missing any capabilities. This is about scaling into new geographies in the United States, both scaling capability. Therefore, we are very selective.
“The opportunities are significant in those target areas. Therefore, our real focus in using inorganic capital to grow is really in industry verticals, whether it’s healthcare vertical, whether it’s the entertainment vertical, whether it’s the technology vertical, acquiring technology companies.
“[We can accelerate] client growth through platforms that come in to the organisation and are able to provide ancillary services to your financial services that bring customer base and accelerate growth.
“We don’t need it to meet our growth targets and to set or meet our performance objectives. Therefore, we are very selective. I see a pathway through our organic capability through returning capital to shareholders through some very selective or probably smaller acquisitions to continue to meet our medium-term objectives.”
