PNC makes a major move to expand their retail presence in the southeast after quietly digesting the larger National City acquired at the beginning of the recession in December 2008. RBC Bank USA formerly Centura Bank, has never met its parent’s profitability expectations since being acquired by the market leading Canadian bank in 2001. Losses in the past seven quarters were more than RBC could tolerate. The divestiture goes against the trend as RBC’s Canadian competitors Bank of Montreal which acquired M&I Bank in Milwaukee recently and TD Bank have been building their US franchise in recent years.
Pittsburgh-based PNC, which beat out rival regional bank BB&T Corp. for the RBC operations, will also purchase $165 million worth of credit-card loans. It is getting $19 billion in deposits and $16 billion in loans. PNC will now own 424 RBC branches in Florida, North Carolina, Alabama and other Southeastern states. Of these, 83 branches are in Florida, where PNC will nearly double its presence. When combined with PNC’s existing network, the company will have 2,870 branches, ranking it fifth among U.S. banks.
“The addition of RBC Bank provides PNC a great opportunity to enter attractive southeast markets in a way that will create value for our shareholders,” said James E. Rohr, PNC’s chief executive, in a statement. “The success of our recent acquisitions demonstrates that when we bring our innovative products and services to new markets we have the proven ability to win clients and take out costs. This transaction represents an outstanding growth opportunity for PNC.”
For more information read the article in the WSJ: http://online.wsj.com/article/SB10001424052702304887904576396063732453334.html?mod=googlenews_wsj