A leading Canadian lender restructures operations, raises CEO pay, and posts strong profits despite layoffs
Royal Bank of Canada (RBC) has laid off some employees following its $13.5bn acquisition of HSBC's domestic business last year, according to Reuters.
The layoffs, which began earlier this week, affected teams in technology and operations, personal banking, and commercial banking.
The exact number of impacted employees remains undisclosed, and it is uncertain if further layoffs will occur.
Last summer, Canada's largest lender restructured its personal and commercial banking divisions into standalone segments and reorganized its senior leadership following the HSBC Canada acquisition.
An RBC spokesperson stated, “With these changes, some difficult decisions have been made and as a result some colleagues were impacted and left the bank,” as reported by Reuters.
The spokesperson added that the bank has provided support and assistance to those affected.
RBC explained that these changes aim to “better position RBC to take advantage of our global scale, simplify how we work and elevate the leaders and talent who will shape our client-focused growth opportunities.”
As of January 31, RBC employed 94,624 full-time staff, a 5 percent increase from the previous year, primarily due to the HSBC acquisition.
The bank also increased CEO Dave McKay’s 2024 salary by 60 percent to $24.5m, as disclosed in a regulatory filing on Thursday. The compensation includes a $4m bonus linked to the HSBC Canada acquisition, the largest deal in RBC’s history.
According to Reuters, some of the layoffs affected RBCx, the bank's tech and innovation banking arm within the technology and operations team.
In related developments, RBC reported strong financial performance in the first quarter following the HSBC acquisition.
The bank's wealth management unit saw a 48 percent increase in income, while capital markets income grew by 24 percent, contributing to higher-than-expected quarterly profits, as reported by Reuters.
