Magazine article American Banker

Cross-Selling, Tech Central to PNC's Overhaul of RBC

Magazine article American Banker

Cross-Selling, Tech Central to PNC's Overhaul of RBC

Article excerpt

Byline: Paul Davis

CARY, N.C. - Nobody knows better what's under the hood of the clunker RBC Bank than its president, Reggie Davis, and he says PNC, which has agreed to acquire it, has the right repairs in mind.

The changes will not be draconian, he said, but PNC's plans would measurably alter how the $25 billion-asset RBC does business in its Southeastern territory.

Davis, who has been the president of the Raleigh bank for roughly two years, said in an interview that PNC will immediately upgrade technology, accelerating a much-needed retooling that would have taken RBC at least five years to do on its own. PNC is also expected to bring treasury management and other fee-generating products to lure prospects before offering them loans.

"It won't take that long at all" for PNC to realize returns from the $3.45 billion deal, Davis said after prepared remarks at the 2011 North Carolina CEO Forum at Prestonwood Country Club. PNC "looked at our strategy and saw that it was consistent with what they're doing in other markets."

PNC Financial Services Group Inc. of Pittsburgh in June struck a deal to buy Royal Bank of Canada's struggling U.S. retail bank, ending a decade-long effort by the Toronto banking company to build a franchise here. In recent years, RBC Bank had lost millions of dollars as it slowly worked through problem loans that included sizable exposures in Georgia (primarily Atlanta) and Florida.

RBC Bank also has branches in Alabama, the Carolinas and Virginia. Besides RBC's 424 branches, PNC has announced two other notable deals in the Southeast this year. It said in July that it would pay $42 million, or book value, for Flagstar Bancorp Inc.'s 27 branches in metropolitan Atlanta. The deal includes $240 million of deposits. PNC also paid a 10% deposit premium to buy 19 branches and $350 million of deposits on Florida's west coast from BankAtlantic Bancorp Inc. …

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