Royal Bank RBC (RY-NYSE-TSX) is one of the big five banks in Canada. the others being BNS, CM, TD, BMO. As a group they have outperformed TSX over the long term and have had a good run the last few years.
it should be noted that the none of the big five would not be big on a global scale.
RBC invested $7 billion starting in April of 2000. They bank bought 11 US companies involved in the financial industry. Such as Dain Rauscher (brokerage) and Centura.
The sad part is the return is not good and does not appear to be improving for instance in 2003 they earned $392 million.
In the last two quarters the numbers have gotten worse, two quarters ago they made $2 million, the last quarter made $6 million.
The mortgage operation have been giving them trouble, also the fact that they have taken write downs on some of their investments.
for a bank like RBC that has a 15%+ ROE on their Cdn. operation the US investments have been a disaster so far. management believes they can turn the problems around and are targeting at least 20 million + for this next quarter. still not great but going in the corect direction.
so far RBC $7+ billion invesments has showed a very small return. would rate RBC a hold, worth buying if the US operations can improve. RBC could hit $55US if they turn operations around if not it is dead money. trading at $48.69US $63.79cdn.
thanks
selkirk
it should be noted that the none of the big five would not be big on a global scale.
RBC invested $7 billion starting in April of 2000. They bank bought 11 US companies involved in the financial industry. Such as Dain Rauscher (brokerage) and Centura.
The sad part is the return is not good and does not appear to be improving for instance in 2003 they earned $392 million.
In the last two quarters the numbers have gotten worse, two quarters ago they made $2 million, the last quarter made $6 million.
The mortgage operation have been giving them trouble, also the fact that they have taken write downs on some of their investments.
for a bank like RBC that has a 15%+ ROE on their Cdn. operation the US investments have been a disaster so far. management believes they can turn the problems around and are targeting at least 20 million + for this next quarter. still not great but going in the corect direction.
so far RBC $7+ billion invesments has showed a very small return. would rate RBC a hold, worth buying if the US operations can improve. RBC could hit $55US if they turn operations around if not it is dead money. trading at $48.69US $63.79cdn.
thanks
selkirk
