December 8, 2009 / 5:03 PM / 9 years ago

UPDATE 1-RBC says mulling acquisition opportunities

* Focusing on building global wealth management business

* U.S. capital markets will grow on existing platform

* Doesn’t see big U.S. retail banking deal in near future

TORONTO, Dec 8 (Reuters) - The head of Royal Bank of Canada (RY.TO) said on Tuesday the bank is mulling acquisitions to build its business, particularly in global wealth management, but does not see a blockbuster U.S. retail banking deal any time soon.

Gord Nixon, the chief executive of Canada’s largest bank, which is emerging from the financial crisis sitting on a huge bundle of cash and poised to grow, said the bank is eager to boost its capital markets and wealth management segments.

But while there has been much speculation that RBC would also like to build on its U.S. retail banking presence, Nixon said he did not expect imminent deal-making because restructuring in the industry was proceeding slowly.

“With respect to larger opportunities, we’re going to be in a period for quite some time here where a lot of the weaker, mid-sized banks continue to rebuild their strengths, and I think it will take some time before restructuring takes hold in the U.S. marketplace,” Nixon told a Goldman Sachs financial conference in New York.

“In that environment, I think it’s pretty unlikely that there will be anything significant or sizable that will occur in the banking space.”

Nixon said RBC could make some smaller acquisitions within U.S. retail banking, but was wary of inheriting “someone else’s balance sheet challenges.”

RBC said on Friday its quarterly profit rose 10 percent to C$1.24 billion ($1.17 billion) as strong domestic banking offset losses at its big U.S. operations.

The bank also ended the year with huge capital levels. It’s Tier 1 ratio rose to 13 percent, the highest of its domestic peers and well above global rivals, leaving the bank well positioned for acquisitions or organic growth.

Nixon repeated the bank’s intention to boost its wealth management division by making acquisitions outside Canada, whether they be in the United States, Europe or Asia.

“I don’t think we are predisposed to one region versus the other. I think we are a little bit predisposed toward the asset management side, provided asset management came with built-in distribution, as opposed to the retail brokerage side,” he said in response to a question.

RBC also plans to continue expanding its U.S. capital markets business, though mostly by spending money on its current businesses and teams, Nixon said.

“It will be very much based on investing in our existing platform, investing in our existing businesses and continuing to add teams or to add asset classes that we think are complementary to the skill set that we have and the competitive opportunity that we have,” he told the conference.

$1=$1.06 Canadian Reporting by Andrea Hopkins; editing by Rob Wilson

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