July 24 (Bloomberg) -- Royal Bank of Canada, the country’s largest lender, closed its European government-bond trading business amid slumping returns from the region.
“This tactical adjustment in our product offering is consistent with our strategy of being active in the markets in which we add the most value to our clients,” Gillian McArdle, a spokeswoman for RBC Capital Markets, said in an e-mail statement. The decision is effective today, the Toronto-based lender said.
Trading revenue across the bank fell 26 percent to C$566 million ($549.6 million) in the three months ending April 30 from a year earlier, the company said in May. Chief Executive Officer Gordon Nixon, 56, said that the “prolonged recession” in Europe affected the firm’s bottom line during the quarter.
“Trading was particularly soft in the latter part of the quarter, due to persistent weakness, particularly in Europe,” Nixon said in a May 30 conference call with analysts following results.
“Europe was extremely quiet, we basically didn’t make any money there,” Mark Standish, co-CEO of Royal Bank’s investment bank, said on the call.
Royal Bank gained 0.6 percent to C$65.43 at 12:16 p.m. in Toronto. The shares have climbed 9.3 percent this year, outpacing the 5 percent advance of the eight-company Standard & Poor’s/TSX Commercial Banks Index.
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