TORONTO — Royal Bank of Canada, the country's largest lender by assets and the world's sixth-biggest wealth-management firm, will continue to leverage its domestic retail franchise to build its global wealth-management presence, its top executive said Friday.
"Our wealth management is an important growth segment for our organization," Royal Bank Chief Executive Gordon Nixon said.
Nixon was speaking at the Toronto-based bank's investor day conference Friday.
"We are the clear leader in Canada and continue to leverage our domestic strength to build a globally competitive business," he said.
The emphasis on building its wealth-management business outside of Canada, where it already dominates the market, is partly because it's not capital intensive, there are relatively low regulatory capital constraints, and as demand grows for retirement and wealth products around the world.
High net-worth individual wealth is expected to grow 8% annually over the next five years, driven from various emerging economies, Nixon said.
"We are growing this segment because of its low capital-intensive nature, making it an excellent complement to banking and capital-markets segments, which require more balance sheet to meet our clients' needs," he said.
"The regulatory environment for wealth and asset management remains relatively stable, giving us the ability to invest in this segment with some degree of certainty and confidence," said Nixon.
The bank's solid capital position "provides us with significant flexibility to take advantage of opportunity without compromising our financial strength, which is critical in today's unstable financial environment," he said.
Royal Bank aims to generate 75% of earnings from retail banking, wealth management and insurance, with the remaining 25% from wholesale-banking activities, Nixon said.
