Canada’s Biggest Bank Is Trying to Fix Its $10 Billion Headache
- City National turned to expensive funding as deposits plunged
- Focus on wealthy clients hurt the US subsidiary, analyst says
This article is for subscribers only.
Royal Bank of Canada wanted to return to the US personal and commercial banking business, and City National Bank seemed to have it all: wealthy Hollywood clients, a foothold in the massive California market and a long history of churning out profits.
Now, almost a decade later, City National has become a $10 billion headache. That’s roughly how much Royal Bank, Canada’s largest lender, has poured into its US subsidiary — an initial purchase price of $5 billion, followed by a series of hefty capital injections.