WASHINGTON — The Federal Reserve on Monday approved PNC Financial Services Group Inc.'s plan to acquire Royal Bank of Canada's U.S. retail-banking unit.
Pittsburgh-based PNC announced in June that it was buying the banking unit, RBC Bank, for $3.45 billion.
The Fed's decision makes PNC, one of the nation's biggest lenders in commercial real-estate, the first bank to pass a new, tougher premerger review required by the 2010 Dodd-Frank financial overhaul. The law requires the Fed to scrutinize and potentially block bank deals that would create an institution so large that its failure would threaten the financial system.
Guggenheim Securities LLC's Jaret Seiberg, in a research note released Monday, predicted the "systemic risk" review won't deal a blow to bank mergers and acquisitions, suggesting only a few of nation's very largest banks would find it hard to expand.
The Fed is separately reviewing Capital One Financial Corp.'s $9 billion plan to buy U.S. online bank of Dutch financial giant ING Group NV. Capital One also plans to buy the U.S. credit-card business of HSBC Holdings PLC for about $2.6 billion
For PNC, which beat out rival regional bank BB&T Corp. for the RBC operations, its transaction is a chance to expand more in the southeastern U.S.
Royal Bank of Canada bought the U.S. retail-banking unit now known as RBC Bank in 2001 for $2.3 billion and expanded it from North Carolina and Virginia to Florida and Georgia. The bank now has more than 400 bank branches in southeastern states.