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RBC announces US$5.4-billion deal to acquire City National bank Royal Bank of Canada has announced that it has entered into a merger agreement to City National Corporation, a premier U.S. private and commercial bank serving high net worth and commercial clients in a deal worth US$5.4-billion Author of the article: Bloomberg NewsPublished Jan 22, 2015 • Last updated Jan 22, 2015 • 3 minute read Article contentRoyal Bank of Canada agreed to buy City National Corp., the Los Angeles-based banker to the stars, for about US$5.4 billion in its biggest takeover ever to expand sales to wealthy U.S. residents. Story continues below This advertisement has not loaded yet, but your article continues below. Article contentRoyal Bank will pay about US$93.80 per share in cash and stock for City National, or 26% more than Wednesday’s closing price, the Toronto-based lender said Thursday in a statement. Canada’s second-biggest lender by assets will pay about US$47.25 in cash and 0.7489 of a share for each of City National’s shares. We apologize, but this video has failed to load. Try refreshing your browser, or RBC announces US$5.4-billion deal to acquire City National bank Back to video
Advertised by Market One Scroll Left Article contentEmail Address Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of FP Investor will soon be in your inbox. We encountered an issue signing you up. Please try again Article contentThe takeover marks an expansion into U.S. private and commercial banking under David McKay, who took over as chief executive officer in August. International investors are the most bullish on the U.S. market in more than five years as America is seen as a bright spot in an otherwise worsening global economy, the latest Bloomberg poll found. Recommended from Editorial
Story continues below This advertisement has not loaded yet, but your article continues below. Article contentThe City National deal fuels expansion in a “country which we view as our second home market,” McKay, 51, said in the statement. “City National serves high-net-worth and commercial- client segments in select high-growth markets, and represents a unique opportunity to complement and enhance our existing U.S. businesses.” Frank Sinatra City National, founded in 1954, has long focused on a show-business clientele. It provided a US$100,000 loan to Frank Sinatra when he needed to pay a ransom after his son was kidnapped in 1963. The bank also lent US$4.5 million to Arnold Schwarzenegger to fund his first California gubernatorial campaign in 2003. The lender first made inroads into New York about a decade ago with five people in an upstairs Midtown office, CEO Russell Goldsmith said in a 2013 interview with Bloomberg News. The bank set its sights on Broadway, and while it doesn’t finance productions, it has provided payroll and cash-management services for shows such as “Book of Mormon” and the recent revival of “Cat on a Hot Tin Roof,” he said. Story continues below This advertisement has not loaded yet, but your article continues below. Article contentCity National expanded earlier in the decade to Atlanta and Nashville to target music producers, talent agencies and law firms, and opened street-level branches in New York to gain visibility in a city where many of its Hollywood clients work and live. U.S. Expansion Royal Bank fell 2.3% to $74.86 at 9:32 a.m. in Toronto, while City National climbed 19% to US$88.54 in New York. City National on Thursday reported net income of US$255.8 million in 2014, up 11% from a year earlier. The bank has US$32.6 billion of total assets, with record loan balances of US$20 billion. Goldsmith will remain as CEO, reporting to McKay, and the firm’s headquarters will stay in Los Angeles, McKay said on a conference call. The business will fall under Royal Bank’s wealth-management division. Story continues below This advertisement has not loaded yet, but your article continues below. Article contentRoyal Bank executives have said they wouldn’t return to traditional bricks-and-mortar retail banking in the U.S. after they sold its money-losing North Carolina-based RBC Bank in 2005, though left open the possibility of expanding its wealth- management business there. McKay said he first approached Goldsmith in 2013, and the deal has been two years in the making. ‘Solid Franchise’ City National “is a solid franchise that will deepen Royal Bank’s penetration in U.S. wealth management and broaden its geographic exposure, particularly in California,” John Aiken, an analyst with Barclays Plc, said in a note to clients. “We do not believe that the price paid by Royal is onerous.” Royal Bank spent more than US$4.6 billion over a decade trying to make inroads in U.S. retail banking starting with its 2001 purchase of Centura Bank. The firm cut its losses in March 2012 when it sold RBC Bank and credit-card assets to PNC Financial Services Group Inc. for US$3.62 billion. Story continues below This advertisement has not loaded yet, but your article continues below. Article contentRoyal Bank had about 7,800 employees in the U.S., where it operates an investment bank and wealth management business. U.S. workers account for about 11% of its total workforce, according to financial statements. Canadian lenders have been expanding in the U.S. through acquisitions. Bank of Montreal agreed to buy Wisconsin’s biggest bank for US$4.1 billion in 2010, and Toronto-Dominion Bank spent about US$17 billion building a branch network from Maine to Florida starting with its 2005 purchase of a 51% stake in Portland, Maine-based Banknorth Group Inc. RBC Capital Markets and JPMorgan Chase & Co. were financial advisers for Royal Bank, while Bank of America Corp. and Sandler O’Neill & Partners LP advised City National. Sullivan & Cromwell LLP and Osler Hoskin & Harcourt LLP were legal advisers for Royal Bank, and Wachtell Lipton Rosen & Katz advised City National. Bloomberg.com Share this article in your social network
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CommentsPostmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your . When did RBC buy City National?The successful merger between City National Bank and Royal Bank of Canada in 2015 is featured in an article that appeared in The Globe and Mail newspaper on Sept. 9.
What companies does RBC own?The following are the principal RBC Financial Group companies that provide products and services under the RBC Insurance platform: RBC Life Insurance Company, Liberty Life Insurance Company, Royal Bank of Canada Insurance Company Ltd., RBC General Insurance Company, RBC Travel Insurance Company, Liberty Insurance ...
Is Citibank and City National Bank the same bank?In 1967, First National City Bank reorganized as a one-bank holding company, First National City Corporation, or "Citicorp" for short. However, the bank had been nicknamed "Citibank" since the 1860s, when City Bank of New York adopted it as an eight-letter wire code address.
How much did RBC pay for City National Bank?Toronto's Royal Bank of Canada on Nov. 2 completed its purchase of downtown's City National Corp., parent company of City National Bank, for about $5 billion in cash and stock.
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Is City National owned by RBC?
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