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UBS Group AG (UBS) - free report >>
Bank Of Montreal (BMO) - free report >>
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Royal Bank of Canada Seeks to Grab Larger Portion of Fees
Royal Bank of Canada (RY - Free Report) plans to increase its share of the $40 billion pool of U.S. investment-banking fees to about 4–4.5% by expanding its operations in the deal making market.
Investment banks charge fees for providing advices regarding takeovers, making arrangements for equity financing and managing sale of bonds. Per the head of RBC Capital Markets in the U.S, Blair Fleming, the bank has a 3.5% share of the fees received by the U.S. investment banking market at present.
Some of the other rival firms reflecting similar thoughts are Bank of Montreal (BMO - Free Report) and The Toronto-Dominion Bank (TD - Free Report) .
The Bank of Montreal plans to maintain its last year’s deal-making success with more such initiatives. Further, in a panel discussion hosted by Bloomberg LP, Patrick Cronin, head of Capital Markets, disclosed that long-term relationships with the clients and leveraging of the bank’s balance sheet would support the expansion plans. Toronto-Dominion held the smallest share of the fees last year but plans to raise it significantly by expanding operations in the U.S. markets.
The Royal Bank of Canada’s goal to become one among the top 10 investment banks in the U.S., in all its lines of businesses is encouraging.
Shares of the company have increased 6.9% in the last six months, underperforming the Zacks categorized Banks- Foreign industry’s growth of 12.8%.
Currently, Royal Bank of Canada carries Zacks Rank #4 (Sell).
A better-ranked stock in the same space worth considering is UBS Group AG (UBS - Free Report) . The company’s current-year earnings estimates were stable over the last 30 days. Further, its shares have gained 8% so far this year. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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