Royal Bank of Canada has established ties with 3.2 million Canadians via the lender’s digital app-building efforts, according to its chief executive officer, who added that the bank will now try to more aggressively convert those users into banking clients.
That spending is poised to rise as the bank ratchets up its conversion efforts through the 17 ventures it has rolled out, such as the Ampli loyalty program, the business-expense tracking app Sorted and the “personal moving concierge” MoveSnap. Another 14 ventures are under development, the CEO said. “We’re a couple years into this now, and we’ve really focused on building those five million new connections that we would have had to buy in a social media or digital channel before,” McKay told analysts during the call. “So we’ve really made that the primary focus and we actually haven’t tried to convert them to RBC product-holders as yet. We’re trying to build deeper relationships, trying to get to know them, and that’s going to pay off over the long term.
The latest earnings were weighed down by $113 million in pre-tax expenses tied to severance and related costs that were “associated with repositioning” of the bank’s investor and treasury services unit, which performs a variety of duties for institutional clients such as pensions, sovereign wealth funds and other banks.
RBC’s latest financial filings showed the workforce of its investor and treasury services unit was 111 jobs smaller for its fourth quarter compared to its third, shrinking the business to 4,684 full-time equivalent employees. RBC also recorded a $142-million pre-tax gain on the sale in the quarter of the private debt business of London-based asset manager BlueBay.
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