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RBC Lures Wall Street Debt Traders With Volumes in U.S. Doubling

Royal Bank of Canada, the country’s largest lender by assets, is hiring credit traders from Wall Street’s biggest banks after doubling annual high-yield debt trading volumes at its U.S. capital markets unit since 2010.

Steve Oplinger starts today in New York as head of U.S. high-yield and leveraged-loan sales and trading after leaving Credit Suisse Group AG (CSGN) in January, according to Sanam Heidary, a spokeswoman at RBC Capital Markets. Robert Williams, a credit trader who worked at Royal Bank of Scotland Group Plc, is also planning to join, said two people with knowledge of the moves, asking not to be identified because the transitions are private.

RBC has hired at least six senior traders and salesmen since 2011 from firms including Credit Suisse, Deutsche Bank AG and Citigroup Inc. (C) as it increases its market share managing dollar-denominated corporate bond sales. The Toronto-based firm has boosted its volume of U.S. high-yield bond trading to about $30 billion in 2012 from $15 billion two years earlier, according Mike Meyer, RBC Capital’s global head of credit.

“We’re selectively hiring where we see our revenues growing,” Meyer said in a telephone interview. “We’ve had nice growth in market share over the past nine to 12 months, in particular in high yield and leveraged loans.”

Photographer: Reynard Li/Bloomberg

Royal Bank of Canada’s expansion contrasts with the thousands of jobs being cut from the world’s biggest banks as they seek to comply with higher capital withholding requirements and the Dodd-Frank Act, passed by Congress in 2010 to limit the risks banks take with their own money. Close

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Photographer: Reynard Li/Bloomberg

Royal Bank of Canada’s expansion contrasts with the thousands of jobs being cut from the world’s biggest banks as they seek to comply with higher capital withholding requirements and the Dodd-Frank Act, passed by Congress in 2010 to limit the risks banks take with their own money.

RBC is ranked 11th-most active manager of junk-bond sales in the U.S., up from 13th in 2011, according to data compiled by Bloomberg. It captured the 10th-highest market share underwriting U.S. leveraged loans, from 12th two years earlier.

Job Cuts

RBC’s expansion contrasts with the thousands of jobs being cut from the world’s biggest banks as they seek to comply with higher capital withholding requirements and the Dodd-Frank Act, passed by Congress in 2010 to limit the risks banks take with their own money.

The 21 primary dealers that do business with the Federal Reserve have reduced their corporate-bond inventories by 76 percent since the pre-crisis peak, to $56 billion on March 27 from $235 billion in October 2007, Fed data compiled by Bloomberg show.

“Balance sheet continues to be important with clients,” Meyer said. “We need to balance that with return on equity and regulatory changes.”

Oplinger, who co-headed U.S. high-yield sales at Credit Suisse, will be responsible for all sales and trading for high- yield bonds, leveraged loans, distressed debt and collateralized loan sales in the U.S., according to Heidary.

Oplinger’s hire “reflects our intention to continue to strategically grow our credit business in the U.S. and globally, leveraging our strong origination platform,” Jonathan Hunter, RBC Capital’s global head of fixed income and currencies, said in an e-mailed statement.

To contact the reporters on this story: Lisa Abramowicz in New York at labramowicz@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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