RBC Dain Rauscher (Royal Bank of Canada)

RBC Dain Rauscher (Royal Bank of Canada)
200 Bay Street Royal Bank Plaza Toronto, Ontario Canada M5J 2J5 416-974-6234
www.royalbank.com

2003 net revenues: $13.0 billion
2003 net income: $2.3 billion
2003 investment banking revenues: $410.2 million
2003 total capital: $16.4 billion

2003 total employees: 60,812

Chairman: Guy Saint-Pierre, C.C.
Chief Executive Officer: Gordon M. Nixon

Royal Bank of Canada operates under the master brand RBC Financial Group.

History

Royal Bank of Canada's roots lie in the Merchants Bank, started in 1864 in Halifax, Nova Scotia. The company incorporated as the Merchants Bank of Halifax in 1869. The company added branches in the next two decades and expanded to western Canada after gold was discovered in Alaska and Canada. It renamed itself the Royal Bank of Canada (RBC) in 1901.

The company had some setbacks during the Depression but recovered during World War II. It got into the mineral, oil and gas industries after the War. RBC tried to start operations in Cuba under Fidel Castro but sold out to a Cuban bank in 1960. In the 1970s and 1980s it opened branches in Europe. In 1991 the U.S. Federal Reserve approved the company's brokerage unit to participate in underwriting stock.

The company was faced with a $650 million loss in 1992 because of bad investments in a property development company owned by the Reichmann family. The company continued to diversify in the 1990s (including internet banking and other online services) and was listed on the New York Stock Exchange in 1995. It became the world's largest securities-custody service providers in 1997 after acquiring The Bank of Nova Scotia's institutional and pension custody operations. CanaDain regulators did not approve a proposed merger with the Bank of Montreal in 1998.

The company was fined by the Ontario Securities Commission for alleged manipulation of pension fund stock by its institutional asset management subsidiary, R. T. Capital Management, which was later sold to UBS.

Business Segments

The company has five major business segments:

RBC Banking
RBC Insurance
RBC Investments
RBC Capital Markets
RBC Global Services

RBC Capital Markets, the corporate and investment banking segment, provides wholesale financial services to corporate, government and institutional clients. The segment has six operating divisions. Judging from the company's annual report, debt underwriting would fall under two of the six divisions.

Global Investment Banking includes the corporate and investment banking businesses and is involved in debt and equity underwriting, mergers and acquisitions and related financial services.

Global Financial Products is involved in the business of origination, syndication, securitization, trading and distribution of debt products such as bonds and derivatives.

RBC Dain Rauscher is the brand name used for the company's investment business in the United States.

Income/Revenues from Business Segments

In 2003 total revenues declined to $13.2 billion from $13.4 billion the year before. Revenues from investment banking declined 26 percent, from $552.4 million in 2002 to $410.2 million in 2003. According to the company's annual report, poor capital market conditions during the first half of 2003 resulted in lower revenues from Global Investment Banking and the Global Equity division.

Net income increased to $2.3 billion in 2003 from $2.0 billion in 2002.