RBC Financial Group is planning to increase its U.S. presence with 15 to 20 new branches per year starting in 2007, said Scott Custer, CEO of RBC Centura Banks Inc. during a presentation at the Canadian Financial Services Conference in Montreal today.
Custer said that planned focus on the U.S. — a market that has proved challenging for the bank in the past — would be primarily in Atlanta and Florida and would follow “slowed expansion” in 2006 as the bank focuses “on key business development and operational initiatives.”
The bank had already outlined these expansion plans after opening 10 U.S. branches in 2005 and 18 in 2004. However, it has previously coped with operational challenges in the U.S., with RBC Centura posting “disappointing” earnings in 2004.
That led the bank to shut down RBC Mortgage Co., its U.S. mortgage business, to focus on “high-growth client segments” such as businesses, business owners, professionals and commercial clients.
Last year, RBC sold RBC Mortgage and its 135 branches for an undisclosed price to a subsidiary of real estate trust New Century Financial Corp.
RBC president and CEO Gordon Nixon acknowledged those challenges when addressing shareholders at the bank’s annual meeting earlier this month, but said that shifted focus has resulted in strong growth of both consumer and commercial loans and deposits while contributing to a “significant improvement” in RBC Centura’s financial performance.