© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the July 2005 edition of BENEFITS CANADA magazine.
RBC’s custody business now ranked ninth globally; first in Canada.

The Royal Bank of Canada(RBC) and Dexia Fund Services are seeking approval to merge their institutional investor services businesses in a new company: London-based RBC Dexia Investor Services(IS). It will have approximately US$1.8 trillion in assets under custody.

The deal will propel RBC to ninth place from 11th globally, with the company continuing to hold a commanding lead in assets under custody in Canada. In BENEFITS CANADA’s 2005 Custody Report, RBC Global Services was the number one custodian, with pension assets under custody as of Sept. 30, 2004 of $300 billion.

Merger talks, which began a year ago, were predicated on increasing RBC’s Global presence, says José Placido, executive vice-president of RBC Global Services and the soon-to-be CEO of RBC Dexia IS.

“We obviously have a strong marketshare here in Canada, and we kind of look to Europe as one of the fastest growing markets that exists,” he says. “In Europe, they were looking for greater capability like we have here in Canada around the middle office: fund administration, the unitholder recordkeeping business, and hedge fund servicing business. So, we thought we could either build or we could partner.”

The agreement means Canadian institutional investors will have a broader range of investment products to choose from, says Placido. “Basically, what we’d like to do is make our product offering much more global,” he says.

He adds, “our local presence on four continents will provide the scale and expertise to meet the needs of global asset managers.”

The creation of the new firm will result in a change in management roles. Placido, who will retain his current title as well as taking on the role of CEO of the new company, will divide his time between Canada and the U.K. Marc Hoffmann, CEO of Dexia BIL and member of the Dexia executive board will be chairman of RBC Dexia IS.

The transaction is expected to close early next year.

Anna Sharratt

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