PNC Financial Services Group Inc said it plans to buy Royal Bank of Canada's US retail bank operations for $3.45 billion in cash and stock, allowing PNC to expand in the US Southeast. The deal may be the start of a new consolidation wave among US regional banks, which are buying smaller competitors to expand into new markets and add customer deposits.
"This is the time to be acquiring franchises in these kinds of markets," James Rohr, PNC Financial's CEO, told analysts on a conference call on Monday. Rohr said he expects fewer small banks to exist five years from now. "The idea of acquiring large banks, those opportunities are few and far between, if not gone entirely, quite frankly," he said. RBC, Canada's largest bank, is offloading a money-losing business as some of its rivals are expanding in the United States. For PNC, the deal expands the Pittsburgh-based bank's Midwestern focus across the US Southeast.
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