Royal Financial institution of Canada plans UK industrial banking push

Royal Financial institution of Canada is planning a push into the UK’s industrial banking market probably by way of an acquisition and can search for alternatives to develop in wealth administration.

Chief government Dave McKay advised the Monetary Instances that he was eager to develop into industrial banking, taking over the likes of NatWest, HSBC, Barclays, and Lloyds, as soon as RBC has totally built-in its non-public financial institution with Brewin Dolphin, the UK wealth supervisor it purchased for £1.6bn earlier this yr.

RBC, the most important financial institution in Canada by market worth, is aiming to make use of the identical technique it employed within the US, the place it purchased Metropolis Nationwide financial institution in 2015 after which mixed it with its wealth administration enterprise, permitting it to supply industrial and personal banking companies to US companies and their house owners.

“What we’ve got within the US, that we don’t have within the UK, is a powerful industrial banking functionality,” McKay mentioned. “That’s actually the core of Metropolis Nationwide financial institution, a powerful industrial non-public financial institution. We wish to replicate that mannequin [in the UK].”

He mentioned he would contemplate an acquisition, “notably one which was like Metropolis Nationwide, the place you had entrepreneurs, industrial, and small enterprise that additionally required private monetary wants on the high-net-worth aspect. That sort of mannequin and synergy has labored very properly for us in Canada and the US.”

RBC’s Brewin Dolphin deal exhibits the financial institution’s ambitions in UK wealth administration. “It vaults us to 3rd largest wealth supervisor within the UK, behind St James’s Place and Rathbones,” McKay mentioned.

“It’s the identical factor we did within the US, we’ve got a technique of constructing out our wealth franchise and capital markets franchise, we wish to serve high-net-worth and industrial purchasers, together with our institutional and company clients. That’s our US technique and . . . within the UK.”

McKay mentioned RBC may additionally have a look at smaller wealth administration offers in Britain. “As soon as we get the [Brewin Dolphin] integration properly alongside the best way, we are going to search for alternatives to amass different smaller gamers and put them on the platform.

The financial institution will rent “extra individuals . . . on the advisory aspect” to develop its mixed Brewin Dolphin and personal banking enterprise within the UK.

RBC can be planning to develop its capital markets enterprise in Britain with additional hires, with a selected concentrate on financing and advising firms shifting away from fossil fuels to wash vitality.

Nevertheless, McKay dominated out getting into UK retail banking. “We have now no ambition to be a digital retail financial institution, or a bodily retail financial institution, outdoors of Canada,” he mentioned.

“It’s very arduous to be a retail financial institution in another person’s market. Nearly all banks have pulled again from being a retail financial institution outdoors of their home market.”