Royal Bank of Canada (RBC) intends to begin a “direct-to-consumer” business in the US, targeting affluent clients.
The new proposition, aimed at expanding the bank’s deposit book, is anticipated to have a 2020-end or early-2021 launch, reported Bloomberg.
The move is said to support RBC’s longer-term growth strategy as it looks to venture beyond commercial lending and wealth management in the US.
RBC CEO David McKay said: “The loan book has been growing faster than the deposit book, so growing our deposit strategy has become of paramount importance.
“You’ll see us bring in some new capability around that to make sure that we’re able to continue to grow both our loans and deposits.”
According to the report, RBC has reported “a little down-market” shift.
The bank, which has hitherto been focusing on UHNW and HNW customers, now focuses on the super-affluent, McKay stated.
In 2012, RBC offloaded its retail banking subsidiary in the US to PNC Financial Services Group.
At present, RBC’s US units include City National Bank, which it snapped up in 2015.
Speaking to Bloomberg News, RBC CFO Rod Bolger said that the plan of a digital bank has been in the pipeline though a return to physical retail banking in the US is unlikely.
The Canadian banking group had a good start to the year, with net income increasing 11% in Q1 2020 to C$3.51bn ($2.64bn) on a year-on-year basis.
The performance was driven by Capital Markets. Personal & Commercial Banking also reported growth.
The latest plan of RBC coincides with JPMorgan’s plans to enter the UK consumer banking market.