RBC targets market share gains in U.S. investment banking

Thu Mar 3, 2016 3:55pm EST
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By John Tilak

NEW YORK, March 3 (Reuters) - Royal Bank of Canada plans to boost its share in the U.S. investment banking market by tapping opportunities with existing mid-sized and large clients and filling gaps left by European banks that are scaling back, one of its key executives said.

With European banks like Deutsche Bank, Barclays Plc and Credit Suisse toning down their investment banking strategies and in some cases playing a less aggressive role in the deal flow, Canadian banks are expanding their presence in U.S. capital markets.

U.S. investment bank Morgan Stanley said last year that it planned to cut up to 25 percent of its fixed-income jobs.

"We've got strong momentum. Some banks are having difficulties, and we're well-positioned to capitalize on opportunities that arise," said Blair Fleming, head of RBC Capital Markets in the United States.

RBC, Canada's biggest bank, has broken into the top ten in U.S. investment banking rankings. It advised on Dell Inc's $24.4 billion deal to go private in 2013 and the leveraged buyout of U.S. security company ADT Corp by private equity firm Apollo Global Management LLC this year. (reut.rs/1UBoblc)

RBC stepped up investments in the U.S. market since the financial crisis and is seeing benefits of that push as the brand becomes more well known and the company targets bigger deals. It also expects its recent $5 billion acquisition of City National, a Los Angeles-based bank focusing on high-net worth clients, to open doors.

As the Canadian market becomes fairly saturated, the United States has become central to RBC's global strategy.

"In the U.S., we're 3 percent against a $40 billion fee pool," Fleming said in an interview, referring to the company's market share in U.S. investment banking. "That fee pool won't likely grow dramatically, but we feel we can take market share from 3 percent to 3.5 percent to 4 percent."   Continued...