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Royal Bank of Canada

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The Royal Bank of Canada (Banque Royale du Canada in French) is Canada's largest company.

Its master brand is RBC and that name is used on all its business units. In Canada, the bank is branded as RBC Royal Bank, a combination of its new master brand and its traditional Canadian brand. Examples include investment banking division RBC Capital Markets, full service investment brokerage firm RBC Dominion Securities, and online investment site RBC Direct Investing. RBC also has a large retail banking presence in the southeastern United States, marketing itself there as RBC Centura which will be called RBC Royal Bank (USA).

RBC is incorporated in Montreal in its formal headquarters at Place Ville Marie but since the late 1970s, all the decisions are made out of Toronto at the Royal Bank Plaza. RBC ranks number 77 on the Forbes Global 2000 list (2007 edition). Its market cap fluctuates at around CAD$ 63.7 billion as of October 31, 2006.

Currently, RBC is the largest financial institution/biggest bank in Canada in both assets and market capitalization.RBC has more than 1,400 branches in Canada,and has branches in 34 countries. Currently, RBC serves more than 15 million customers.

Timeline

International timeline

RBC has carved out a name for itself as a leader in the Caribbean region. RBC Royal Bank maintains a profitable base from its Caribbean operations, and has retained high brand recognition among its other top competitors. RBC is especially known in the anglophone Caribbean for its various personal and business banking services in retailing, loans, and credit offerings.

RBC Centura

RBC now has a large retail banking presence in the southeastern United States, marketing itself there as RBC Centura. RBC Centura has unveiled plans for a move of its headquarters to Raleigh. The bank has recently merged with Flag Bank, increasing its presence in Georgia. RBC continues to grow in the Southeast after acquiring 39 branches of AmSouth Bank in Alabama on March 9, 2007 (previously RBC Centura had no locations in this state). RBC announced on January 17, 2008 that the "Centura" Branding will be removed in April 2008 and the U.S. operations will operate as RBC Bank.

RBC will soon have an expanded presence in Alabama, Georgia, and Florida after its acquisition of Alabama National Bancorporation is complete; therafter it will have to rebrand the banks it has acquired. RBC received US regulatory approval on 2/5/08.

ANB currently operates in these three states through eleven different subsidiaries:

  • Alabama

    • First American Bank (Birmingham & Huntsville)
    • Alabama Exchange Bank (Tuskegee)
    • Bank of Dadeville (Dadeville)
  • Georgia

    • Georgia State Bank (Metro Atlanta)
    • The Peachtree Bank (Metro Atlanta)
  • Florida

    • Indian River National Bank (Vero Beach)
    • First Gulf Bank (Escambia County, FL & Baldwin County, AL)
    • Florida Choice Bank (Metro Orlando)
    • Community Bank of Naples (Naples)
    • Cypress Coquina Bank (Ormond Beach)
    • Millennium Bank (Gainesville)

RBC Centura experienced fraud problems in 1994 related to mortgages that were made to fictitious people and/or inflated appraisals. The estimated loss was $29,000,000. In November of 2007, RBC Centura was involved in the "Dunmore Homes" project in Sacramento that stopped all construction on August 8, 2007 due to liquidity issues with the homebuilder. The company was subsequently sold to a mortgage loan officer for $500 and quickly incorporated in New York. Soon after the company filed for bankruptcy in Manhattan. After details of the sale became known to RBC Centura Bank, a major Dunmore Homes creditor, the bank sued on November 7. The company alleged in a lawsuit filed in Fresno County that the sale of all the assets for a mere $500 wasn't adequate and was done to "hinder, delay and defraud the creditors," including RBC. RBC, a Raleigh, N.C.-based subsidiary of the Royal Bank of Canada, financed four Dunmore projects from Bakersfield to Yuba City. It loaned Dunmore Homes a total of $105 million and, according to an affidavit by a Dunmore Homes official, is still owed $39 million. As collateral, it has secured claims against those projects. But the company says the value of a Fresno project is less than the outstanding loan balance. Nine major lenders, including RBC, are owed a combined total of $196 million on Dunmore Homes' 26 new-home communities, according to the builder. RBC Centura's net income dropped to $75 million for the 12 months ended September 30, 2007 - down 16.3 percent from the year ended September 30, 2006, according to figures released by the Federal Deposit Insurance Corp.

Competition

Main competitors are Citigroup, Credit Suisse, Crédit Agricole, BNP Paribas, Bank of America, Wells Fargo Bank, Royal Bank of Scotland, Deutsche Bank, Goldman Sachs, HSBC, ING, JPMorgan Chase, Dresdner Kleinwort, Natixis, Lehman Brothers, Morgan Stanley, Merrill Lynch, Wachovia, and SunTrust among others. Major Canadian competitors in personal markets include TD Canada Trust, Bank of Montreal, CIBC, Bank of Nova Scotia, and some credit unions.

Logo

The bank's symbol is a golden lion clutching a globe, on a blue background. An older version had a crown above the globe and had the lion facing to the left rather than the right. The change coincided with an expansion in United States markets. The logo is known and recognized in Canada as a famous symbol.

Corporate governance

Edson Loy Pease (1856-1930), a Quebec native, was a chief executive and managing director of the bank and one of the key people in its history. An employee of the Merchants' Bank of Halifax, he built that bank's Quebec business to where Montreal became its centre of operations. His efforts saw the Bank formally relocate its head office in 1907 to St. James Street in Montreal following which he induced the prominent Montreal business magnate Herbert S. Holt to accept an appointment as the bank's new President. While at the time Holt's presidency was largely a ceremonial position, his name substantially raised the bank's profile and broadened its business connections.

The title of Royal Bank's top executive has changed several times. Initially it was styled as President. Later, it became Chief Executive Officer and one often carried additional responsibilities as Chairman of the Board, while the second-in-command was the President. Allan R. Taylor was Chairman and CEO from 1986 to 1994, and he was succeeded by John Cleghorn in that capacity from 1994-2001. Gordon Nixon is currently the President and Chief Executive Officer, as the bank decided to appoint a non-executive chairman after Cleghorn's retirement.

President

Chairman

  • David O'Brien 2004-present

Current members of the board of directors are: Geoffrey Beattie, George Cohon, Douglas Elix, John Ferguson, Paule Gauthier, Jacques Lamarre, Brandt Louie, Gordon Nixon, David O'Brien, Robert Peterson, Pedro Reinhard, Timothy Hearn, Kathleen Taylor, Victor Young, Michael McCain, Alice Labeige.

History of Head Offices

RBC's legal headquarters still remains in Montreal at Place Ville-Marie. However, all management operations were moved to its current location in Toronto at the Royal Bank Plaza, making this the company's functional headquarters.

Media attention

According to a global Newsweek ranking, which measures how effectively companies manage environmental risks and opportunities relative to their industry peers, Royal Bank of Canada is the most environmentally friendly company in the world.

On January 15, 2007, CBC Radio reported RBC is "refusing" people of certain nationalities to open U.S. dollar accounts with the bank. Canadian citizens with dual citizenship in Cuba, Iran, Iraq, Myanmar, North Korea or Sudan (mostly countries with U.S. sanctions) are affected. The U.S. Treasury Department restricts certain foreign nationals from using the U.S. dollar payment system to limit terrorism and money laundering after the September 11, 2001 attacks. RBC replied that the compliance with such laws do not represent an endorsement by the bank and on January 17, clarified its position on the application of the U.S. laws, specifying that "with some exceptions" it does open accounts for dual citizens of the sanctioned countries.

In 2002, RBC purchased the naming rights for the Entertainment and Sports Arena in Raleigh, N.C., home to the Carolina Hurricanes of the National Hockey League and North Carolina State University basketball. The arena was renamed the RBC Center, with a 20-year lease at a cost of $80 million. In June 2006, the RBC Center was host for the NHL's Stanley Cup Finals, and on June 19, 2006, the Carolina Hurricanes defeated the Edmonton Oilers in the RBC Center to win the Stanley Cup.

Memberships

RBC is a member of the Canadian Bankers Association (CBA) and registered member with the Canada Deposit Insurance Corporation (CDIC), a federal agency insuring deposits at all of Canada's chartered banks. It is also a member of:

References

  • McDowall, Duncan. 1993. Quick to the Frontier: Canada's Royal Bank. Royal Bank of Canada.

External links

Historical bank notes



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Last updated on Saturday March 08, 2008 at 19:00:00 PST (GMT -0800)
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