Finance: The head of the custody bank’s Luxembourg operations said that no positions will be eliminated following its change in ownership.
News broke Tuesday that Canada’s largest bank would buy out its joint venture partner’s stake in RBC Dexia Investor Services, giving Royal Bank of Canada 100 percent control of the business.
Questions about the firm’s future--and of its 1,500 employees in Esch-Belval--had lingered since October, when Dexia Group first said it would sell-off its share of RBC Dexia as part of a state rescue plan.
“I can confirm this transaction will not have any impact on staff levels in Luxembourg,” Sebastien Danloy, managing director of RBC Dexia in the Grand Duchy, told Delano.
“In Luxembourg it has been business as usual as far as all our employees are concerned,” Danloy said. “It is clear this change has been received very positively by staff here.”
During his interview, Danloy said the buy-out “gives us some continuity in terms of our shareholding structure.” He pointed out RBC is one of the world’s largest banks and rated as one of the strongest. “Clearly this gives us some comfort and to really look positively on this shareholding change.” Danloy added that “in terms of our own growth strategy at RBC Dexia, both at the global level and on a local basis, the backing of RBC will really help us in our growth plan for the next five years.”
While he would not provide specific details of the company’s future strategy, Danloy did say that RBC Dexia wants “to leverage [its] dominance in the Luxembourg marketplace and therefore we are implementing a strategy to really continue to grow our business in Luxembourg.” He said the firm would specifically focus on services for Luxembourg and Irish investment funds.
Some analysts have expressed concern that with the cutting of ties with Dexia, RBC Dexia will lose ground in European markets, where Dexia traditionally had been strong and RBC less active. Danloy conceded that “although Dexia had a European heritage, over the past few years RBC has done extremely well in growing its presence of its wealth management and capital markets divisions [in Europe], and these two divisions are very complementary to our own services at RBC Dexia.”
Asked if his company would continue to work with Dexia Asset Management, one of its major customers that now will fall outside the same corporate umbrella, Danloy would only state that “today Dexia Asset Management is our client.”
Danloy added that the buy-out was still subject to regulatory approvals, but hopes the deal will close “at end of June of this year.”
A spokeswoman for the bank later told Delano that following the completion of the transaction, “we anticipate that our name would change to better reflect the new ownership.”
TEXT: Aaron Grunwald · PHOTO(S): Luc Deflorenne (archives)