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You are here: Home > SWOT analysis of Royal Bank of Canada
SWOT analysis of Royal Bank of Canada
By admin on June 14, 2012in SWOT
news and informations automotive,business,crime,health,life,politics,science,technology,travelautomotive,business,crime,health,life,politics,science,technology,travel RBC is a financial services group with operations in personal and commercial banking, wealth management, insurance, corporate and investment banking, and securities custody and transaction processing. RBC is one of the largest banks in Canada measured by assets and market capitalization and one of the North America’s leading diversified financial services companies, but changes in interest rate policy and regulations may affect the group’s profitability.
Leading market position in Canadian financial services industry
RBC is Canada’s largest bank as measured by assets and market capitalization and one of the North America’s leading diversified financial services companies. In personal and business banking, RBC ranks in top one or two positions in most of the retail products. In asset management it is the top mutual fund provider among Canadian banks, the largest Canadian bank owned insurer and one of the top 10 Canadian life insurance producers. In Canada, the group is the leading full-service brokerage firm as measured by assets under administration (AUA), with close to 1,440 investment advisors serving affluent and high-net-worth clients. It is the largest fund company and one of the largest money managers in Canada, with a 15% market share (end FY2010) as measured by assets under management (AUM). In corporate and investment banking, RBC maintains its position as the top-ranked securities underwriter and the leading mergers and acquisitions advisor. Leading market position in Canada enables the group to gain economic scale benefits.
Significant presence in the US and the UK
In the US, RBC IS the sixth largest full-service retail brokerage firm with almost 2,100 financial consultants (at end FY2010), serving correspondent clients and individual investors directly with over 2,100 financial consultants through a national network in 42 states. RBC Bank in the US owns 426 banking centres and approximately 480 ATMs. In 2010, RBC Bank was ranked among the top five deposit holders in North Carolina and ranked seventh overall as measured by deposits in its southeastern US footprint. In the UK, RBC is a top five Gilt-edged market maker. Significant presence and capabilities in the US, and the UK enable the group to benefit from expanding Canadian international trade.
Strong balance sheet providing resilience to adverse market developments
RBC’s balance sheet is strong. The group’s Tier 1 capital ratio of 13%, Total capital ratio of 14.4%, and Tier 1 common ratio of 9.8% (as at October 31, 2010), coupled with its low leverage, demonstrate the strength of its balance sheet and capital position. The group’s capital ratios are greater than those required under Canadian (Tier 1 capital ratio greater than or equal to 7% and a Total capital ratio of greater than or equal to 10%) and Basel II standards. Moreover, Based on the current strong capital position, the group expects to meet the Basel III requirements within the established timelines (The common equity and Tier 1 capital rules are expected to be phased-in from January 2013, with the capital conservation buffer phased-in between January 2016 and January 2019). The group’s capital position remained strong in 2010 primarily through internal capital generation from earnings and the issuance of additional regulatory capital for general business purposes. Moreover, the group’s Canadian Banking division’s operating leverage declined from 2.6% at end FY2008 to 1.1% end FY2010, which indicated the hidden potential for raising new capital at...