Royal Bank of Canada: how the company developed
The Royal Bank of Canada (RBC) is the largest financial institution in the country. Its shares are traded on the Toronto and New York stock exchanges. The bank’s annual revenue exceeds US$56 billion, and its profits reach US$15 billion. The bank manages assets worth approximately US$2 trillion.
Its business structure consists of five divisions, each responsible for its own area:
1. Personal and Commercial Banking conducts banking operations in various countries.
2. Wealth Management works with retail investors.
3. Capital Markets provides investment banking services.
4. The Insurance division offers insurance products for private clients and companies.
5. Investor and Treasury Services offers fund management.
The bank’s branches employ 94,000 people. They serve more than 17 million customers.
History
The Royal Bank began operations in 1864 under the name Merchants Bank of Halifax. A group of entrepreneurs involved in maritime transport and trade founded it. Initially operating as a private institution without a charter, the bank met the needs of its founders. Over time, the bank’s activities expanded, and in 1869, it became a public company with its own charter. In the following years, the bank opened several branches in other regions of the country. In 1893, the company listed its shares on the Montreal Stock Exchange.
Expansion of the bank’s activities
Between 1900 and 1930, the bank expanded its operations significantly. It entered the international market and opened representative offices in Bermuda and other countries. The business’s development was facilitated by rebranding and a new development strategy:
1. In 1901, the bank changed its name to the Royal Bank of Canada.
2. In 1907, management decided to move the head office from Halifax to Montreal.
3. The following year, branches appeared in the central city of each province in the country.
4. The business actively implemented a strategy of mergers and acquisitions. This allowed the bank to enter new markets, including Ontario.
5. In 1925, RBC acquired Union Bank of Canada, adding 327 branches to its portfolio. This deal is still considered the largest in the country’s banking sector.
In 1929, the Royal Bank’s assets exceeded US$1 billion. This was the first such achievement in Canadian history.
Modern history
In 1970, RBC began developing its international business. The bank merged with financial institutions from the United States, the United Kingdom, and Germany. This partnership resulted in the formation of Orion Bank, which handled currency transactions involving the euro and the dollar.
In 1988, RBC expanded its business through asset management. To accomplish this, RBC acquired 67% of Dominion Securities’ shares. Dominion Securities is the largest investment dealer in Canada.
RBC continues to grow by buying up competitors and entering new markets. One of the largest deals in recent years was the acquisition of HSBC Bank Canada in 2022. The deal was worth US$13.5 billion.
