logo
Share SHARE
FONT-SIZE Plus   Neg

Royal Bank Of Canada To Buy Full Ownership Of RBC Dexia Investor Services

Royal Bank of Canada (RY,RY.TO) said it agreed to acquire the 50 per cent stake that RBC does not already own in the joint venture RBC Dexia Investor Services Ltd. from Banque Internationale à Luxembourg S. A. for total consideration of 837.5 million euros, or C$1.1 billion, in cash. Following the closing of the transaction, Royal Bank of Canada will own 100 per cent of RBC Dexia.

Royal Bank of Canada expects the acquisition to be moderately accretive to earnings in 2013.

In conjunction with entering the agreement, RBC Dexia has sold C$1.9 billion in nominal value of Dexia Group fixed income securities back to the Dexia Group (DEX.L, DXBGF.PK) and acquired approximately an equivalent amount of U.S. dollar-denominated securities consisting primarily of notes issued by large global financial institutions. RBC Dexia will incur a loss from the sale of the Dexia Group securities and RBC's proportionate share of this loss is approximately $30 million after tax, which will be recorded in the second quarter. RBC Dexia's capital position is not materially impacted from this sale and purchase of securities.

At closing, this deal is expected to reduce Royal Bank of Canada's January 31, 2012 Tier 1 capital ratio on a pro forma basis by approximately 25 bps.

The acquisition is anticipated to close in mid-2012.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
The Justice Department has initiated a probe to find out if airlines are colluding to limit seating capacity in order to benefit from higher airfares. Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud has pledged to give away his entire wealth amounting to $32 billion for charity. He said the fund will be utilized for cultural understanding, develop communities, empower women, enable youth, provide vital disaster relief and create a more tolerant and accepting world. Toyota accepted the resignation of its Chief Communications Officer Julie Hamp, following her arrest in Japan for allegedly mailing banned painkillers to her address in Japan from U.S.
comments powered by Disqus
RELATED NEWS
Trade RY now with 
Follow RTT