RBC is shoring up City National Bank’s finances following a money-losing quarter caused by higher interest rates and regional banking confidence issues. RBC injected capital into City National and purchased its debt securities, boosting the division’s liquidity and capital while reducing expensive borrowing.
Analysts at Keefe, Bruyette & Woods likened this to an “internal bailout” and while it won’t significantly impact RBC’s financials, it raises concerns about City National Bank’s health.
The exact amounts and terms of the transactions were not disclosed. RBC is taking these actions to enhance City National’s profitability amid challenging conditions in the U.S. regional banking landscape.