Royal Bank of Canada has given its U.S. debt markets unit the same brand name used by the rest of its investment banking operations here.
The idea, according to executives, is to make customers of its equity services equally aware of Toronto banking company's fixed-income capabilities here, including its balance-sheet management products. Royal Bank also wants to direct fixed-income customers to its equity division.
The U.S. debt markets unit, formerly called RBC Dain Rauscher, was renamed RBC Capital Markets this month. Larry Holtz, the head of the Minneapolis unit, said the changes match a yearlong initiative designed to link its capital markets capabilities more closely to the balance-sheet products it offers.
"This is part of a fuller strategy in covering midsize depository banks with a more complete product set, from the CEO down to the portfolio manager," he said in an interview after the change was announced.
RBC Capital Markets is the brand Royal Bank also uses for its U.S. investment banking operations.
In addition, the fixed-income group, which used to report to the wealth management group, now reports to the capital markets group.
Keith Leggett, a senior economist with the American Bankers Association, said it makes sense to promote fixed-income services. With spreads shrinking, community bankers are examining ways to manage interest rate risk, he said.
"Those bankers may be looking for advice … especially given the current environment," Mr. Leggett said.
Royal Bank, which has spent more than $6 billion on U.S. acquisitions since 2000, has made a series of strategic adjustments in the past 13 months. In October of last year it restructured its Raleigh unit, RBC Centura Banks Inc., and in August it sold RBC Mortgage to New Century Mortgage Co.
Mr. Holtz said the combined operations of RBC Capital Markets should be able to more effectively market global debt products to equity customers. The fixed-income group has largely focused on underwriting municipal bonds and acting as a middle-market distributor.
He said that his group, which joined Royal Bank after it acquired Dain Rauscher Corp. in 2001, would direct its customers to other investment banking services. He said it targets banks with $1 billion to $20 billion of assets, and there are 440 such banks in the country.
The group currently does business with fewer than a quarter of those banks, Mr. Holtz said, though he would not say what how many it wants to serve.
Vincent Boberski, the head of the financial services group at RBC Capital Markets, said it plans to launch a "marketing-intensive" campaign to promote its combined platform to customers.
"The logical first place to start is with our deeper relationships," and RBC Capital Markets would look to position itself among the few companies that offer such a "unified product offering," he said.
Several New York companies, including Sandler O'Neill & Partners LP and Keefe, Bruyette & Woods Inc. already offer both equity and fixed-income services to financial institutions.
Thomas Killian, a principal at Sandler O'Neill, said there is likely room for more firms that are looking to pair such services. "We feel that we do a good job," he said in an interview. "But there are 9,000 banks out there, with almost 800 started in the last five years. There is no question that there's a huge market."
A spokesman for Keefe Bruyette said it would not discuss the matter.
Mr. Leggett said it would make sense for RBC Capital Markets to focus more on banks on the low end of its targeted range. The larger banks in that range would be more likely to have in-house expertise when it comes to balance-sheet management, he said.
Mr. Boberski said his unit plans to use the rebranding initiative to attract new customers and will target the real estate investment trust and insurance industries in the long-term.
Mr. Holtz said Royal Bank is content with the mix of U.S. and global offerings. The company, which bought the Boston brokerage firm Tucker Anthony Sutro in 2002, has no immediate need for additional acquisitions, he said.
