Wed, April 03, 2024 at 18:54

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    Kang-hoon

    • Good day, Annie.

    • Today, we have news from the Royal Bank of Canada (RBC).

    • The CEO, Dave McKay, has expressed optimism about the future of their struggling U.S. unit, City National Bank.

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  • Annie

    • Oh, really?😮 I remember RBC acquired City National back in 2015, right?

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    Kang-hoon

    • Correct.

    • However, City National faced some difficulties due to rapid growth and the regional banking crisis in the U.S. last year.

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    • This led to a capital injection and a shake-up of its top executives.

  • Annie

    • Sounds like they had a tough time.

    • But what makes McKay so optimistic now?

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    Kang-hoon

    • McKay believes that City National has now reset its foundation for growth.

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    • He is confident that the bank will contribute positively to RBC's overall performance going forward.

  • Annie

    • Interesting!🤔 And how about their recent acquisition of HSBC Canada?

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    Kang-hoon

    • Indeed, RBC just completed the purchase of HSBC Canada over the weekend.

    • This C$13.5 billion deal was announced back in November 2022 and adds C$120 billion to RBC's nearly C$2 trillion assets.

  • Annie

    • Wow, that's a huge deal!👏 But what about job security?

    • I heard there were some concerns.

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    Kang-hoon

    • Yes, as part of the approval conditions, RBC was asked by the federal government to maintain and create new Canadian jobs, and assure job guarantee for at least six months after closing the deal.

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    • McKay stated that they have largely addressed over hiring during the pandemic through layoffs in preparation for the deal close.

  • Annie

    • I see.

    • And what about the mortgage rates?

    • Will there be less competition now?

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    Kang-hoon

    • McKay addressed those concerns as well.

    • He said that it's a myth and perception due to advertising.

    • HSBC, known for advertising Canada's lowest and most transparent uninsured mortgage rates, didn't actually discount off that rate in practice.

  • Annie

    • Got it!

    • So, is this news good or bad for the market?

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    Kang-hoon

    • In my view, this is good news.

    • RBC's successful acquisition of HSBC Canada and their optimism about City National's future growth could potentially boost investor confidence in the bank.

    • Upon comprehensive consideration, this news is perceived as a 😍Bullish.