RBC Backed Away From Canadian Acquisitions, CEO Nixon Says

Royal Bank of Canada (RY), the country’s largest bank, has backed away from recent Canadian takeover opportunities because they didn’t meet the company’s goals, Chief Executive Officer Gordon Nixon said.

“They were inconsistent with our domestic distribution strategies and our margin and risk objectives,” Nixon said today at a banking conference in Toronto hosted by Scotia Capital. He didn’t say which companies were involved.

Royal Bank, which gets more than half of its earnings from Canadian banking, will continue to look for ways to expand its asset base in Canada, Nixon, 54, said. Royal Bank will also use market turmoil to make “strategic acquisitions” in areas such as wealth management and investment banking, he said.

“We are monitoring the challenging competitive landscape closely, watching for opportunities to accelerate our growth in core businesses, geographies and client segments while maintaining a conservative approach in recognition of very unstable economic conditions in the United States and Europe,” Nixon said.

He reiterated a previous comment that the global banking sector faces “significant headwinds” driven largely by fiscal and economic challenges in the U.S. and Europe.

“In this environment, it is our objective to ensure that we are well-positioned to grow our earnings and to take advantage of global dislocations without putting us at extreme risk from uncontrollable external shocks,” Nixon said.

To contact the reporters on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net; Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net; Rick Green at rgreen18@bloomberg.net

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