Royal Bank of Canadas net income for the quarter ended April 30, 2012 fell 7% from C$1,682 million for the prior corresponding period on the back of the RBC Dexia takeover.
RBC signed an agreement April 3 to buy Dexias 50% stake in global custodian RBC Dexia. RBC will pay 837.5 million for Dexias half. Dexia was forced to sell off its healthiest business units and restructure its remaining businesses in order to pay off bailout loans it took at the height of the crisis in 2008.
The bank reported a C$202 million acquisition loss from buying the stake.
The European Commission two weeks ago approved the RBC Dexia Investor Services deal, whereby the Royal Bank of Canada will buy out Dexias half of the joint venture. The deal passed clearance under the EU Merger Regulation after being examined under the simplified merger review procedure, the EC said in a statement.
The transaction is still anticipated to close in mid-2012. Until such a time it remains business as usual, said a spokesperson for RBC Dexia.
Commenting on the results, Gordon Nixon, RBC president and CEO said: “Our solid second quarter results reflect continued business growth and an investment in a strategic acquisition with attractive growth prospects,” said Gordon M. Nixon, RBC President and CEO. “We continue to take advantage of our strength, scale and strong capital position to drive cost efficiencies and invest in our businesses to deliver long-term growth.”
(JDC)