L.A.’s biggest bank is officially Canadian.
Toronto’s Royal Bank of Canada on Nov. 2 completed its purchase of downtown’s City National Corp., parent company of City National Bank, for about $5 billion in cash and stock.
With RBC Chief Executive Dave McKay at City National’s offices to commemorate the deal – welcomed by an In-N-Out burger truck – City National Chief Executive Russell Goldsmith said RBC’s nearly $830 billion balance sheet straps “booster rockets” to City National, which holds $33.5 billion in assets.
Goldsmith and his father, Bram, have been the only two chief executives in the last 40 years of City National, causing some banking observers to lament the deal as the end of an era for the iconic L.A. banking family. However, McKay insisted that he is in no way tightening the reins on City National’s local leadership.
“They’re successful because they’re close to their customers,” he said. “They’re entrepreneurial in how they serve customers quickly. All this has to remain in place.”
The bank will keep its City National name and remain headquartered at the City National Plaza in downtown. Goldsmith will stay and take over RBC’s U.S. wealth management business.
“We’ve allowed Russell to increase his mandate,” McKay said.
City National, now a wholly-owned subsidiary, will effectively become RBC’s American retail banking franchise. There are no plans to open RBC branches in the United States, or for that matter, City National storefronts in Canada.
But both chief executives spoke of the ability of the combined bank to provide crossover services. For example, a City National film client shooting in Vancouver will be able to set up Canadian accounts through an in-house handoff with RBC.
The City National sale caps a string of local banking mergers that have reshaped the lending landscape in Los Angeles. The city’s second-largest bank, Pasadena’s OneWest Bank, was acquired by CIT Group Inc. in Livingston, N.J. in August. The number of banks and thrifts headquartered in Los Angeles has dropped from 77 as of June 30, 2011 to 55 this year.