(Reuters) - Royal Bank of Canada (RY.TO) is seeking ways to re-enter U.S. consumer banking just two years after the Canadian lender took a C$1.6 billion ($1.56 billion) loss from the sale its money-losing U.S. retail bank network.
Speaking to reporters after the lender’s annual general meeting in Calgary, Chief Executive Gord Nixon said RBC was looking for opportunities to build a presence in internet banking and payment systems, rather than simply buying a U.S. consumer bank.
“We’ve been looking (for) an opportunity to look at the U.S. through a very different lens, given the fact that our industry is going to transform so much from a technology perspective,” he told reporters following the meeting, which took place on the same day the bank released first-quarter results.
Nixon was vague on details but said there was plenty of room for new players in the payment space.
“You’ve got the likes of PayPal (EBAY.O), you’ve got Google wallet (GOOG.O), but I think from a technology perspective there will continue to be transformation and pressure on the payment systems and the way individuals buy goods and services,” he said.
“It’s very early stages, and it’s very much looking at it from the strategic perspective.”
He also said the bank was on the lookout for international wealth management acquisitions.
“If we found the right opportunity, particularly in the international equity side that was complimentary, that would be a logical area for us to invest in,” he said.
RBC’s previous foray into U.S. consumer banking is not one the bank would like to repeat.
Its $2.2 billion purchase of North Carolina-based Centura bank in 2001 quickly turned into a cash sinkhole for the bank as it first struggled to turn a profit and then was hit by the worst of the U.S. real estate crash.
While the bank currently has little presence in U.S. consumer banking, its RBC Capital Markets wholesale bank has grown steadily, and now is larger in the United States than it is in Canada, Nixon said.
Reporting By Cameron French; Editing by Frank McGurty; Desking by Diane Craft