Royal Bank of Canada said Tuesday that it has taken a 20% stake in AOL Canada Inc., a subsidiary of Dulles, Va.- based America Online Inc.
Paying $60 million for the equity, Canada's No. 2 bank underscored its North American on-line banking ambitions. Also figuring in the deal is Royal Bank's Internet-only subsidiary, Security First Network Bank of Atlanta. The bank also owns part of S1 Technologies Inc., from which it acquired Security First Network Bank last year.
Royal Bank, its Internet bank, and its on-line brokerage subsidiary Bull & Bear Securities Inc. of New York have committed a total of $7.5 million to develop cobranded marketing strategies with AOL in Canada and the United States.
Jack Davies, president of AOL International, said the Royal Bank connection creates opportunities to reach 10 million customers, including 420,000 small and midsize businesses, 1.7 million telephone customers, and 420,000 on-line clients.
Terms of the contract were not disclosed, though Royal Bank has an option to increase its investment in AOL Canada.