CANADA FINANCE-RBC CEO says buying in banking doesn't make sense

(This story is part of a special Reuters News package highlighting Canada's financial sector. For a complete listing of stories, click on [ID:nN19445229].) (Repeats Reuters interview from June 2)

* Financial markets have turned corner, economy lagging

* Sees trading revs leveling, ambitious profit targets

* Sees U.S. builder loan business recover first in upturn

* Hired 200 brokers in US wealth management in first half

By Jack Reerink and Andrea Hopkins

TORONTO, June 2 (Reuters) - Gordon Nixon is the dealmaker who never did the big deal -- and is darn proud of it.

The chief executive of Royal Bank of Canada (RY.TO), the country's largest bank, credits a focus on internal growth, an adversity to risk, and a diversity of businesses as reasons why the bank escaped the maelstrom that has taken down the world's biggest financial institutions.

Buying often doesn't make sense in banking, says the former investment banker, not even when prices look cheap.

"I don't believe that there is any rush to deploy capital given what has occurred in the marketplace," Nixon, 52, said in an interview at the bank's headquarters in Toronto on Tuesday.

"You may pay more a year from now than you will today for a particular asset, but if you can buy it with a much higher degree of certainty, then that makes a lot more sense than trying to catch a falling knife today and cutting yourself."

Sure, Nixon, who in 2001 at age 44 became the youngest chief executive of a Canadian bank, acknowledges the bank has made plenty of mistakes. Most prominent: the U.S. purchases that put it in the red in the second quarter -- for its first quarterly loss since 1993.

Provisions for loan losses went up the third quarter in a row to C$974 million ($902 million), more than half of that for the U.S. market.

Nixon is not about to do an encore.

"Why would you pay a big price today? Even though values have come down dramatically, the risk-reward of buying a big balance sheet in the United States in today's economic environment, with the high degree of uncertainty and the very uneven and uncertain regulatory environment" isn't there, Nixon said.

Even so, Nixon is seeing rays of light in RBC's big U.S. exposure -- described by one Bay Street analyst as the albatross around the bank's neck. The bank's loans to builders in the U.S. South should turn the corner first when the economy recovers.