The business manages client assets in excess of US$2 billion on behalf of clients located across the three regions.
The business to be acquired includes clients who reside in Latin America, the Caribbean and Africa, as well as key private banking staff based primarily in Geneva, Switzerland and also includes a team in the Cayman Islands, RBC said.
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Commenting on the move, George Lewis, group head of RBC Wealth Management, said: "This business represents an excellent opportunity to increase our market share with high net worth and ultra high net worth clients in key high growth markets, while delivering very attractive returns."
Around 20 private bankers from Coutts will join the RBC fold under Karen Simpson, who heads RBC’s emerging markets division, Lewis added.
RBS’s decision to exit the markets of Latin America, Caribbean and Africa follows a strategic review which was initiated earlier last year by Rory Tapner, CEO, Wealth division of RBS Group.
Rory Tapner said: "Our Latin American, Caribbean and African business is solid. However, it requires further investment to reach our preferred market share and we have determined to focus our efforts on our core markets."
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By GlobalDataCoutts said that its growth strategy will focus on key geographies which include the UK, Switzerland, Middle East, Russia/CIS and selected countries in Asia.
Details of the deal were not disclosed, but it is expected to complete in the latter part of the second quarter.
RBC already has a presence in the Caribbean but is working from a low base in Latin America and Africa.
WealthInsight believes that the acquisition will help the Canadian bank to further expand its footprint in Latin America wealth management market, which experiencing turf wars on an international scale between asset managers, private banks and family offices.
The competition is hot as Latin America experienced a 23% rise in assets under management in 2010, bringing total managed assets to more than US$1 trillion, according to data from Cerulli Associates. Figures from the Brazilian regulator Anbima demonstrate assets under management in the Brazilian private banking market alone grew by EUR20 billion in 2011.
RBC has wealth offices in Chile, Uruguay and Sao Paolo but it also serves emerging markets clients from its Swiss operations, similar to Coutts which primarily serves Latin American clients out of Geneva, with a team in the Cayman Islands.
While the acquisition adds only fractionally to RBC’s US$305.7 billion in assets under management, but will enable the company to meet its stated objective of growing its private banking business outside the home market by allocate more capital outside of Canada’s low-growth environment.
In 2010, the RBC split its international wealth-management division to create two standalone units: a U.K. and emerging markets business.
The acquisition has growth benefits, low capital intensity, low earnings volatility – so it’s an attractive outlook for RBC’s capital, WealthInsight opines. It is obviously positive directionally.
