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RBC Continues Strategic Review of Its International Wealth-Management Business

RBC Continues Strategic Review of Its International Wealth-Management Business

Posted by PanamericanWorld on April 13, 2015

Royal Bank of Canada is continuing a strategic review of its international wealth-management business, its top executive said Friday, leaving the door open to more asset sales.

Chief Executive David McKay’s remarks come about a week after RBC announced plans to exit another Caribbean operation through the sale of its Suriname bank. His comments suggest that more pruning of the bank’s international wealth-management division could be in the works.

“We continue to look at our international wealth franchise and to make decisions there,” Mr. McKay told reporters after the bank’s annual meeting in Toronto.

He didn’t provide timelines for the bank’s review, but he said options could include exiting from individual customer segments or entire businesses that are found to be incapable of producing acceptable shareholder returns over the long term.

“Those franchises that don’t meet that test—as we just did in Suriname and Jamaica—we will make that type of decision,” Mr. McKay said.

“If we can rectify in other ways, we’ll do that through changing our business. So we continue to go through that process, as I mentioned in the Caribbean, and look at marketplaces where we don’t feel we can serve our customer efficiently, effectively and profitably,” he added.

He offered no update on the strategic review of the bank’s Swiss operations, first disclosed last November. The Wall Street Journal reported in January that RBC had hired J.P. Morgan Chase & Co. to run a sale process for RBC Suisse SA, its Swiss wealth-management operations, citing people familiar with the matter.

Last week, RBC announced it was selling its Suriname bank to Trinidad and Tobago’s Republic Bank Ltd. for an undisclosed amount. The bank said it expects to book a pretax loss of 23 million Canadian dollars ($18.3 million) on the sale.

RBC, Canada’s biggest bank by market capitalization, has closed wealth-management offices across Latin America and the Caribbean as growing regulatory pressure to counter money laundering affects the way banks do business around the world.

In February, The Wall Street Journal reported that RBC was exiting from once-promising businesses in Latin America and the Caribbean after being swept up in the net of global money-laundering probes. The bank has said that it works within the legal and regulatory frameworks of every country in which it operates and that it has a strong record of regulatory compliance.

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