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UPDATE 2-Raymond James to buy Allied Irish's Canadian assets
June 30, 2011 / 9:27 PM / 6 years ago

UPDATE 2-Raymond James to buy Allied Irish's Canadian assets

* Deal adds $650 million in loan commitments

* New unit will focus on corporate, real estate banking

* Terms of deal not disclosed (Adds background on RJ Bank)

CHARLOTTE, N.C., June 30 (Reuters) - Raymond James Financial Inc’s (RJF.N) bank subsidiary has agreed to buy nearly all the assets of Allied Irish Bank’s (ALBK.I) Canadian operations, the St. Petersburg, Florida-based brokerage and investment bank said on Thursday.

Raymond James Bank will acquire $650 million in loan commitments as part of the deal for the Toronto-based operations of Allied Irish.

Under the deal, Raymond James Bank will create a new Canadian finance company, expanding its corporate and real estate banking business.

Raymond James said the deal will expand its corporate and real estate loan portfolio by 10 percent.

Terms of the deal were not disclosed. It is expected to close by the end of the September quarter, pending U.S. and Canadian regulatory approvals.

The purchase is a reversal from last summer, when the bank’s credit issues overshadowed the rest of the brokerage.

At the time, company executives warned that credit issues would remain elevated as long as the economy lagged.

But the bank’s credit woes appear to be improving in recent quarters.

As of March 31, RJ Bank reported pre-tax quarterly income of $42 million, up from $30 million a year earlier.

The company’s fiscal second-quarter net charge-offs also declined to $8.5 million, from $20.7 million a year earlier. (Reporting by Joe Rauch. Editing by Robert MacMillan)

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