Royal Bank of Canada has announced plans to launch a direct-to-consumer bank in the US as it seeks to boost its deposit base and wealth-management franchise.
RBC's business catering to wealthy clients in the US is largely driven by its City National franchise, a bank it bought in 2015 for USD 5.4 billion. The deal has paid off by allowing the bank to benefit from the growth in US wealth-management businesses, according to Marketscreener.com.
RBC has four branches in New York, and plans to open three more in the city in 2020. The bank will also add one more branch in Washington, doubling its branch network in the nation's capital.
According to executives, the loan book has been growing faster than the deposit book, so growing RBC’s deposit strategy has become of paramount importance. Though details about the types of services the online bank would offer weren’t yet provided, the new challenger bank will allow RBC to cultivate customers "a little bit down market" from the extremely wealthy clients the bank's wealth-management business usually courts, according to bank officials.
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