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RBC Hires JP Morgan To Handle Swiss Bank Sale - Media

Tom Burroughes, Group Editor, 12 January 2015

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Royal Bank of Canada has reportedly hired JP Morgan to advise it on the sale of its Swiss banking operations, a move that would follow those of other north American banks in pulling out of the Swiss market.

Toronto-listed Royal Bank of Canada has reportedly hired JP Morgan to advise it on the sale of its Swiss banking operations, a move that would follow those of other north American banks in pulling out of the Swiss market.

A report by Bloomberg, quoting an unnamed source, said the US bank had been hired by the Canadian firm to help it dispose of the operation in Switzerland. The hiring of JP Morgan had been reported earlier by the Wall Street Journal; the US bank declined to comment. This publication, meanwhile, is in contact with RBC on the matter for comment.

RBC has initiated a review of some of its global private banking and wealth management operations. Like a number of other firms, it has been looking to consolidate some of its business lines and sharpen profitability. Morgan Stanley and Bank of America, for example, have exited some non-domestic markets, including the Swiss one, which is now under pressure due to its long-standing tax haven status. RBC is also shutting down its international client wealth management business in the Caribbean, along with some international advisory businesses in Canada and the US.

The bank continues to have a significant international offering, such as in its trusts arm and has a presence in regions such as Asia. In September last year RBC Wealth Management appointed three Greater China heads based in Hong Kong, bringing the trio from Coutts, Credit Suisse and ANZ.

If a deal is being contemplated, RBC would not be the only bank to be looking to offload its Swiss private bank. Royal Bank of Scotland has put its international wealth arm up for sale, including its Swiss operation.

Swiss business
Royal Bank of Canada (Suisse) reportedly had total assets of about SFr2.02 billion ($2 billion) and retained earnings of about SFr23.7 million in fiscal 2013, according to regulatory filings (source: Bloomberg).

Results for RBC’s wealth arm have been strong recently. Royal Bank of Canada in December reported fourth quarter wealth management net income of C$285 million ($251 million), up $83 million or 41 per cent compared to last year – mainly due to higher earnings from growth in average fee-based client assets at its global asset management and Canadian wealth management businesses.

 

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