By Alex Chambers
LONDON, July 24 (IFR) - Royal Bank of Canada shut down its
European government bond trading business on Wednesday,
reversing an expansion into the sector which started three years
"We review our businesses regularly and make changes to
optimize them as needed. This tactical adjustment in our product
offering is consistent with our strategy of being active in the
markets in which we add the most value to our clients," the bank
said in a prepared statement.
RBC started building up a portfolio of European primary
dealerships in 2010, but this morning the five traders on the
desk were informed the bank was pulling back from the market,
according to several sources.
"The European business is a central part of our platform and
of our strategy globally. We see this as an opportunity to
refocus our efforts and invest in areas of core strength within
the region," RBC said.
RBC's expansion three years ago also included a major push
into the debt capital markets, especially in the high volume
sovereign, supranational and agency sector. Being a primary
dealer and thus active in trading government bonds is widely
seen as being essential to winning syndicated sovereign bond
A spokesperson for RBC was keen to stress it remained
committed to Europe and is still a primary dealer in Canada, the
US, the UK, and the equivalent of a primary dealer in Australia.
There is no suggestion that it is pulling out of DCM or the
SSA business, where it has hired several veterans.