WSJ: PNC Financial Wins Bid For RBC's US Retail Bank -Source

Date : 06/17/2011 @ 1:06PM
Source : Dow Jones News
Stock : BB&T Corp. (BBT)
Quote : 43.83  0.18 (0.41%) @ 3:59PM

WSJ: PNC Financial Wins Bid For RBC's US Retail Bank -Source

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PNC Financial Services Group Inc. (PNC) won the bid for Royal Bank of Canada's (RY) U.S. retail banking business, according to a person with knowledge of the matter.

A deal is expected to be announced soon, that person said.

The bidding for RBC Bank of Raleigh, N.C., came down to two bidders, PNC of Pittsburgh, and BB&T Corp. (BBT) of Winston-Salem, N.C., said people familiar with the matter. But BB&T was unwilling to pay book value for RBC, which is around $3.5 billion, according to a person with knowledge of the matter.

RBC and PNC declined to discuss the matter; BB&T couldn't be reached for comment.

RBC bought the U.S. bank, then called Centura Banks, in 2001 for $2.3 billion and expanded it from North Carolina and Virginia to Florida and Georgia with additional acquisitions.

The bank now has 420 bank branches in six southeast states, but it failed to garner big shares in its banking markets. It was hit hard by the U.S. housing crisis and recession. Since taking a C$1 billion writedown on the business in 2009, RBC has focused on revamping the operations.

The deal would give PNC a chance to expand more in the Southeast, an area it has little presence in outside of Florida. With RBC's branches in the Carolinas and down the southeastern coast, PNC would be able to fill in the gaping hole in its footprint between its mostly northern Virginian locations and Florida branches.

As one of the nation's biggest lenders in commercial real-estate, PNC also would be adding to that portfolio, for better or worse, as RBC had a heavy concentration in commercial real estate.

Bloomberg reported news of the deal earlier.

--By Dan Fitzpatrick, Matthias Rieker, and David Benoit; 212-416-2471; matthias.rieker@dowjones.com




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