WSJ: PNC Financial Wins Bid For RBC's US Retail Bank -Source
June 17 2011 - 1:06PM
Dow Jones News
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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