RBC Capital Markets

RBC Capital Markets is the investment and corporate banking division of the Royal Bank of Canada. It is seen as a mid range investment bank, that while ranked as one of the top 17 global banks, but they are not among the elite banks. The magazine Euromoney has voted it the Best Investment Bank in Canada two years in a row.

RBC Capital Markets employs 3,100 people in 75 offices in fifteen countries. RBC Capital Markets claims to have offices in every major North American city and clients in 150 countries. Its head office is in Toronto, although it has large operational presences in London and New York. Like many Canadian institutions, it is seen as a very stable financial institution with a rating of AA- from Standard & Poor and an AAA rating from Moody’s. These ratings are some of the highest in the industry.

The parent company, the Royal Bank of Canada is one of the “big five” Canadian banks. It is the largest financial institution in Canada, and by some measures the largest company. A retail bank, it has branches all through Canada as well as branch networks in other parts of the world, such as the South-eastern United States and the Caribbean. It has been trading since 1864 when it started in Halifax, Nova Scotia. Although most of the early growth of RBC Capital Markets was driven by the contacts that the retail bank had built up, over time it has become more of a free standing investment bank with an international presence.

RBC Capital Markets is seen as being stronger in infrastructure finance, fixed income, foreign exchange and structured products. The Global Infrastructure Group is particularly focussed on transport and energy with a particular focus on public private partnerships. In fixed income it has won a number of awards with Bloomberg awarding it as top in corporate debt financing. It also has a presence in commodities, derivatives and equity markets.

RBC Capital Markets has suffered some criticism due to its market leading position in financing the extraction of bitumen from oil sands. It has financed more than $6 billion for 13 companies. It has been alleged that there was a lot of water table pollution that resulted from this extraction. Canada has a very strong presence in natural resource financing due to the fact that Canada’s economy is dependent on its abundant natural resources. The Toronto Stock Exchange is the international center for listing natural resource stocks. RBC Capital Markets, like other Canadian origin banks is very strong in this sector, having won the title of “Oil & Gas Adviser of the Year” at the 2009 World Independent & Junior Oil and Gas Awards.

RBC Capital Partners runs the private equity and mezzanine funds. Their private equity specialism has a focus on high technology companies. These are further focused on telecommunications, technology and life sciences. This means that RBC Capital Partners can be important within their niche despite their small size. Their mezzanine fund is not as focused as their private equity fund, as it focuses on a significant free cash flow.