Coutts acquisition strengthens RBC WM

RBC Wealth Management’s acquisition of the regional assets of the private banking business of Coutts demonstrates RBC’s commitment to grow its global wealth management business. The purchase of Coutts’ private banking business in Cayman, as well as key private banking staff in Geneva, Switzerland, was announced in late March.

“This acquisition shows our dedication to growth. Many of our competitors are suffering from financial pressures, downsizing, reducing scope, closing offices. RBC Wealth Management is constantly looking for the right person, team or company to acquire, which is key to our plans for growth,” said Deanna Bidwell, head of Caribbean at RBC Wealth Management.

As a result of the deal, eight banking professionals have joined RBC Wealth Management in Cayman.

“The team of professionals that have joined the RBC Wealth Management from Coutts are fantastic. They are very professional, hard working and incredibly dedicated to their customers. They are a real strong addition to the relationship management team,” Ms Bidwell said.

In addition to Caribbean offices in the Bahamas and Barbados, RBC Wealth Management has been in Cayman for 40 years and had a staff of about 100 before the acquisition of Coutts from Royal Bank of Scotland. In addition to the new professionals, the purchase of Coutts brings RBC Wealth Management new clients.

“The Coutts bankers that have joined RBC Wealth Management have a large portfolio of Caribbean clients. One of RBC Wealth Management’s key objectives is to grow our complement of Caribbean clients, so this is a great way to expand our local services. And, to benefit these clients, more global and local products and services are available,” Ms Bidwell said.

The clients from Coutts will be able to maintain their relationships with their advisors, but now will have a greater choice of jurisdictions.

“The Coutts model was to provide local relationship managers, but as with most European banks, the actual service of the products are done in Switzerland. As RBC Wealth Management clients, not only do the clients have the Swiss booking jurisdiction to choose from but also Cayman, Bahamas, Barbados, London, New York, Canada, etc. It is a far more global proposition that fits well with Coutts’ superb private bankers as trusted advisors,” Ms Bidwell said.

The sale of Coutts’ regional businesses followed a strategic review by Rory Tapner, the CEO of the Wealth division of Royal Bank of Scotland Group, the parent company of Coutts. The review announced in March 2012 aims to focus the business on growth in key markets in the UK, Switzerland, Middle East, Russia/CIS and selected countries in Asia.

“We have made substantial progress executing against our strategic growth plan over the last year, as evidenced by our recent financial results. Our Latin American, Caribbean and African business is solid,” Mr. Tapner said. “However, it requires further investment to reach our preferred market share and we have determined to focus our efforts on our core markets.”

He said, “In RBC Wealth Management, we have found a private wealth manager who is committed to growing their business in these markets over the long term. We have every confidence that RBC will continue to offer our clients the excellent level of service which they have come to expect.”

In total the sale includes client assets in excess of US$2 billion.

“This business represents an excellent opportunity to increase our market share with high net worth and ultra high net worth clients in key high growth markets while delivering very attractive returns,” said George Lewis, group head, RBC Wealth Management. “As the sixth-largest wealth manager in the world, we can offer these clients the very high level of personal service and global capabilities that they expect from a top tier international firm.”

About 10 per cent of RBC’s clients are based in emerging markets. In Latin America, RBC has wealth offices in Chile, Uruguay and Sao Paolo but it also serves emerging markets clients from its Swiss operations.

In addition to money and people, the acquisition of Coutts should further strengthen the reputation of RBC, which Euromoney had already named as the Best in Private Banking in Cayman in 2012, Ms Tidwell said.

“Coutts is a premier name in the private banking business. With RBC Wealth Management’s strength and stability, plus our local products and services and our own private banking business, the acquisition brought together the reputation of the Coutts private bankers together with the diverse business model of RBC Wealth Management,” she said.