RBC to sell its Suriname banking operation
TORONTO - Royal Bank of Canada (RY on TSX and NYSE) or (“RBC”) today announced that it has entered into a definitive agreement to sell RBC Royal Bank (Suriname) N.V. (“RBC Suriname”) to Republic Bank Limited, subject to customary closing conditions, including regulatory approvals.
"As we continue to focus our Caribbean operations on markets in which we can be a leading competitor for the long-term, we have made the decision to sell RBC Suriname to Republic Bank Limited." said Kirk Dudtschak, Executive Vice President and Head, RBC Caribbean Banking. "This transaction supports the successful repositioning of our Caribbean business for the future and allows us to focus on markets where we can strengthen our operational capabilities and where we see opportunities for growth."
While financial terms of the transaction were not disclosed, the purchase price approximately reflects the book value of RBC Suriname.
RBC expects the transaction to result in a loss of C$23 million (before and after-tax) under International Financial Reporting Standards, largely related to an estimated write-down for the proportionate share of RBC Suriname goodwill and other intangibles. The transaction is not expected to have a material impact on RBC's Basel III Common Equity Tier 1 ratio.
The loss is based on current estimates and is subject to change and will be reflected in the results of the second quarter ending April 30, 2015. RBC will release its second quarter 2015 results and host an earnings conference call on May 28, 2015.