According to four people familiar with the matter, Canada’s biggest lender has its Asian wealth business under review
The Royal Bank of Canada is considering selling its Asian wealth management business, according to a breaking story published by Reuters earlier this morning. The report states that four people familiar with the matter told Reuters that Canada’s biggest lender has its Asian wealth business under review.
RBC’s decision comes in the aftermath of several major Western firms exiting the Asian private banking space due to increasing compliance fees, sluggish growth and pressure to cut costs.
Reuter’s sources reported that Royal Bank of Canada’s review came about after the bank's global head of wealth management decided that the bank’s Asian business (less than $10 billion in assets) is unable to produce adequate profit. One of sources did add, however, that the review won’t necessarily result in a sale of the wealth management business in Hong Kong, Singapore and the rest of Asia.
"There will definitely be a question mark over profitability of this kind of a business that lacks scale," a person with knowledge of the development is quoted as saying in Reuters’ article. “Is it a core business for RBC in Asia? The answer is, probably not."
The value of the bank’s Asian wealth business is up for debate and, if the sale does become a reality, the main interest is expected to come from Singapore-based lenders DBS Group Holding and OCBC, both of whom have been looking for ways to build their wealth management businesses, two M&A bankers said.
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RBC’s decision comes in the aftermath of several major Western firms exiting the Asian private banking space due to increasing compliance fees, sluggish growth and pressure to cut costs.
Reuter’s sources reported that Royal Bank of Canada’s review came about after the bank's global head of wealth management decided that the bank’s Asian business (less than $10 billion in assets) is unable to produce adequate profit. One of sources did add, however, that the review won’t necessarily result in a sale of the wealth management business in Hong Kong, Singapore and the rest of Asia.
"There will definitely be a question mark over profitability of this kind of a business that lacks scale," a person with knowledge of the development is quoted as saying in Reuters’ article. “Is it a core business for RBC in Asia? The answer is, probably not."
The value of the bank’s Asian wealth business is up for debate and, if the sale does become a reality, the main interest is expected to come from Singapore-based lenders DBS Group Holding and OCBC, both of whom have been looking for ways to build their wealth management businesses, two M&A bankers said.
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