Royal Bank of Canada, which had $1 billion in earnings from its U.S. businesses last year, expects to double that amount in five to seven years, Chief Executive Officer David McKay said.
McKay is "very excited" by U.S. growth prospects of the RBC Capital Markets unit and contributions its City National acquisition will have on its U.S. wealth business, he told reporters Wednesday in Montreal after the lender's annual investors meeting. Royal Bank bought the Los Angeles-based private and commercial bank in November for $5 billion in its largest takeover.
"We certainly see a very strong trajectory for growth in the U.S. and we expect to have two very strong franchises contribute to RBC for some time," said McKay, 52. "We see ourselves doubling our profitability in that market over roughly a five-to-seven year time frame."
Royal Bank posted annual profit of C$10 billion ($7.6 billion) for the fiscal year ended Oct. 31, with about half of that coming from Canadian banking, according to financial disclosures. The company's RBC Capital Markets business was the second-biggest contributor, accounting for about 23 percent of earnings for 2015.