By Agency Reporter

Royal Bank of Canada, the country’s largest lender, is seeking buyers for its United States consumer banking operation a decade after entering the market, said three people with knowledge of the talks.

Royal Bank is getting advice from JPMorgan Chase & Company on the potential sale of the RBC Bank unit, said the people, who spoke on the condition of anonymity because the talks were private.

Royal Bank spokeswoman Katherine Gay declined to comment on a potential sale of RBC Bank and said the bank remained committed to its US growth strategy, Bloomberg reported on Thursday.

The Canadian lender is retreating from US consumer lending after investing about $4.6bn in the last decade to buy banks in southeastern states, including North Carolina, Florida and Alabama. Toronto-based Royal Bank is pulling out as competitors Toronto-Dominion Bank and Bank of Montreal expand by acquiring troubled US lenders in Florida and Wisconsin.

Royal Bank, the best-performing Canadian bank stock this year, rose by 12 cents to C$60.40 in 11:14am trading on the Toronto Stock Exchange.

The international-banking unit, which includes Raleigh, North Carolina-based RBC Bank, had 10 consecutive quarterly losses before returning to profitability in the first quarter of 2011, according to the bank’s financial statements. RBC Bank is the smallest of Royal Bank’s US operations, which also include wealth management and the RBC Capital Markets investment bank.

RBC Bank had $4bn of equity capital and $27.6bn of assets as of December 31, according to data on the Federal Deposit Insurance Corporation’s website.

The Canadian lender has spent two years reorganising RBC Bank, which started after the lender took a C$1bn ($1bn) writedown on the US business. RBC Bank suffered losses due to impaired loans from homebuilders and other business clients during the US subprime meltdown and financial crisis.

During the restructuring, Royal Bank cut more than 1,000 jobs, replaced management, reduced ties to real estate and pared commercial lending to restore profit at the bank, which has more than 420 branches.

Royal Bank Chief Executive Officer, Gordon Nixon, said in a March 2010 interview that “everything is on the table” in weighing options for its US consumer bank, including a sale, merger or takeovers to revive the business. Nixon said during a January 11 banking conference this year in Toronto that he was unsure whether Royal Bank would be a buyer or seller of US banking assets.

“In the short-term, our priority is to get the US bank performing at a more normalised level,” Nixon said.

Source: Punch