NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) released a research report entitled “Royal Bank of Canada and City National Corporation Merger Comment.”
Headquartered in Toronto, Royal Bank of Canada (“RBC” or the “Bank”) (NYSE: RY) is Canada’s largest bank as measured by market capitalization and is one of North America’s leading diversified financial services companies. RBC provides personal and commercial banking, wealth management services, insurance, investor services, and wholesale banking on a global basis through offices in Canada, the U.S., and 42 other countries.
Historically, RBC has been rather acquisitive in terms of growth strategy. The banking group has acquired a variety of financial institutions to augment its existing platform. In the mid-2000s, RBC focused on expansion into banking in the southeastern United States. Given that this geographic region was particularly challenged throughout the crisis, RBC exited U.S. regional retail banking in 2011, divesting operations to The PNC Financial Services Group, Inc. (NYSE:PNC). Four years later, RBC decided to reenter the U.S. banking field, this time with a focus on commercial banking and wealth management through the acquisition of City National Corporation (NYSE: CYN), which is expected to close in the fourth quarter of 2015. The merger will add over $30 billion in assets to RBC’s balance sheet. According to the Bank, this deal enhances and complements RBC’s U.S. presence and creates expansion platform for long-term growth.
In August 2014, KBRA affirmed the senior unsecured long-term debt and deposit ratings of AA and the short-term rating of K1+ for Royal Bank of Canada. The outlook on all ratings is stable. The ratings are supported by RBC’s sound financial fundamentals, as evidenced by its strong capital position and trending improvements in terms of asset quality and earnings. The ratings also reflect the Bank’s emphasis on global investment banking and the risks associated with a high concentration in capital markets activities. The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology, published on January 28, 2015. The ratings and supporting rationale are available at www.kbra.com.
Please use the following link to view the report: www.krollbondratings.com/show_report/1983
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