Whoa, Canada: Bank lives up to its name
Scott Custer knows how it looks to outsiders when a subsidiary of a big bank announces that its 52-year-old CEO is retiring and will be replaced by someone from corporate. And it doesn’t help that less than a month before the announcement of Custer’s retirement, Raleigh-based RBC Bank, the U.S. banking arm of Royal Bank of Canada, also changed its chief financial officer and filled the job of president for the first time in more than a year.
Here’s how it looked to one outsider, analyst Robert Sedran of National Bank Financial in Toronto: “The performance at the bank overall has been wanting, and this is part of an ongoing restructuring to fix that performance.”
Net income in Royal Bank’s latest quarter was up 24% from the year before, but it struggled in the previous two quarters, and RBC Bank, burdened by loan losses, has been a drag on earnings. It lost $110 million in the quarter ending June 30 and also posted losses in the three previous ones, according to filings with the Federal Deposit Insurance Corp.
Here’s how the changes looked to Tony Plath, associate professor of finance at UNC Charlotte: “It’s pretty clear that they’re doing things the Canadian way right now, not the American way.”
Custer doesn’t care much for the views of analysts and other outsiders. “They always have opinions even though they are almost always unencumbered by any facts.”
But in some ways, their explanations don’t seem markedly different from his. He says RBC Bank decided last spring to make substantial changes in the way it operates, including bringing in a president and new CFO. And RBC Bank will be more closely connected to its parent. His replacement, Jim Westlake, is also head of Royal Bank’s international banking and insurance group. He’ll split time between Raleigh and corporate headquarters in Toronto when he takes over this month. “Jim ran the Canadian banking business for about five years prior to taking on the job he has now. Our Canadian retail bank is one of the best in the world, and so I think he’ll bring some of those best practices even in a more clear and defined way.”
Custer, a 22-year veteran of the bank and its predecessor, became CEO in 2004 and a year later moved the company from Rocky Mount to Raleigh. On his watch, RBC Bank grew from 271 branches to 430. It has more than 5,000 employees — about 500 in the Triangle. He says he’d been thinking for a few months about retiring, but he wanted to finish the reorganization first. “Everybody thinks there’s something else to it, but it was just my decision. I’m retiring from RBC. I’m not retiring from my career. I hope I won’t be unemployed too long. I haven’t been unemployed in a long time, so hopefully there will be another chapter in my career.”
DURHAM — EMC plans to build a $280 million data center that will employ about 290 in Durham County. The Hopkinton, Mass.-based maker of data-storage computers is still looking for a site but hopes to open the center late next year. It also plans to add 105 jobs at its research center in Research Triangle Park and factory in Apex. About 750 work at those two locations.
RALEIGH — Dallas-based Affiliated Computer Services began adding 465 jobs at its call center here. That will increase employment to more than 1,150. It also added 100 employees at its call center in Henderson, bringing employment there to about 370.
DURHAM — Cree plans to add 275 jobs locally by the end of the year, increasing employment to about 1,775. The manufacturer of light-emitting diodes will add 300 more jobs by the end of 2012. It also raised $434 million by issuing more than 12 million shares of stock.
GARNER — Omaha, Neb.-based ConAgra Foods will lay off 300 workers this month at a factory that makes Slim Jim snacks. That will cut employment to about 450. Production was down about 50% because of damage from an explosion in June.
RALEIGH — First Citizens BancShares bought Venture Bank from the Federal Deposit Insurance Corp. The price wasn’t disclosed. Venture, based in Lacey, Wash., had been shut down by regulators. With Venture’s 18 branches, First Citizens has 430 in 19 states.
DURHAM — Advertising agency McKinney added 70 employees, primarily because it won a contract with Columbus, Ohio-based Nationwide Mutual Insurance. It also won a contract with EAS, a sports-nutrition brand owned by Abbott Park, Ill.- based Abbott Laboratories. The hires bring employment to 230.
RALEIGH — Alcatel-Lucent, a French manufacturer of communications equipment, laid off 40 employees in Raleigh, leaving it with about 290.
RESEARCH TRIANGLE PARK — The North Carolina Biotechnology Center plans to open a $10.4 million, 20,000-square-foot addition to its headquarters late next year. The nonprofit, which recruits biotechnology companies, has outgrown its 47,000-square-foot building.
MORRISVILLE — Salix Pharmaceuticals won approval from federal regulators to sell Metozolv ODT to treat diabetic gastroparesis, a stomach ailment that afflicts about 5 million diabetics. The drug is expected to gross about $50 million a year.
CLAYTON — Turkington USA opened a factory here to replace one it closed in Goldsboro. About 110 of the 125 Goldsboro employees moved to the new plant, and the British oven maker plans to hire 35 more.
RALEIGH — The N.C. State Bar plans to build a four-story, $14 million headquarters here. The organization wants to start using the building in 2012.
MORRISVILLE — American Airlines will cut nine of 53 daily flights next year at Raleigh-Durham International Airport. The Fort Worth, Texas-based carrier will end nonstop service to St. Louis, Columbus, Ohio, and Hartford, Conn., and cut two of its seven flights to Boston.
MORRISVILLE — Japanese software developer GrapeCity purchased FarPoint Communications, which makes spreadsheet-software tools. Terms weren’t disclosed. GrapeCity plans to keep FarPoint’s 50 employees.
RALEIGH — St. Jude Medical, a St. Paul, Minn.-based medical-devices maker, invested $15 million in Micell Technologies, which is developing a drug-coated stent for heart patients. Earlier this year, Micell closed on a $5 million round of financing.