Our Canadian personal and business segment
includes Canadian banking, investments and global insurance businesses
including Canadian, U.S. and international insurance operations.
Our U.S. and international segment now includes banking and investments
in the U.S., banking and brokerage in the Caribbean and Global
Private Banking internationally. Throughout 2004, we took steps
to provide new solutions and better service to our clients and
earned more of their business as described below.
Our focus is to establish ongoing relationships
with clients by providing them with innovative and timely products
and services that meet their needs.
For example, the sale of mortgage products frequently
leads to opportunities for us to develop stronger relationships
and increase product holdings with our clients, such as providing
other financing or investment products.
We strengthened our position in home mortgage
financing in Canada in 2004. Overall, our residential mortgage
market share increased to 15.12 per cent
as at August 31, 2004, a 62 basis point lead over the
next strongest competitor and a 24 basis point improvement over
2003, reinforcing our leadership position in Canada.
In 2004, we exceeded $90 billion in home financing
to Canadians delivered through our mobile specialized mortgage
sales force and our branch network. Several product innovations
contributed to this growth, including RBC
Homeline Plan, launched
in April. This product provides clients a home equity borrowing
solution that combines a credit line and one or more mortgage tiers.
As clients pay down their mortgage, their available credit increases,
giving them access to additional credit at favourable rates without
having to re-apply. Also introduced was Canada’s first vacation
home mortgage, providing clients up to
90 per cent financing. We also launched the RBC
No Down Payment Mortgage, allowing homebuyers with steady cash flow and good credit
to obtain financing without the required minimum 5 per cent down
Product and service innovations are critical
to our ability to continually enhance our offering to clients.
In July, we became the first major Canadian bank to give clients
the ability to view cheques online through RBC
Additional innovative features to RBC Online Banking introduced
in 2004 include online stop payments, enhanced capability to receive
pay bills electronically, secure e-mail communication to our staff
and Interac* Email Money Transfers to
other individuals that have a bank account at any Canadian bank.
* Registered trademark of Interac Inc. Used under licence.
At present, we are the only major Canadian financial
institution to offer its clients the ability to view online their
accounts held at other North American financial institutions. In
addition, in October, we became the first major Canadian financial
to offer our clients the ability to use their debit cards
to access their primary Canadian chequing account
for purchases at over a million retailers in the U.S.
Overall, the number of clients enrolled in
RBC Online Banking and Investing continues to grow; with over a
quarter of our clients enrolled at the end of 2004, an 18 per cent
increase over a year ago.
New product enhancements and effective marketing
resulted in credit card sales volume and balance growth of 16 per
cent and 14 per cent, respectively, in 2004. The introduction of
the RBC Rewards Visa Classic card, with no annual fee,
gives clients the ability to earn points towards travel, merchandise
and gift certificates, and contributions to registered retirement
savings plans and registered education savings plans. Our premium RBC
Royal Bank Visa Platinum Avion card realized strong growth
attributable to effective direct promotion to clients, selective
credit limit increases, balance transfer programs and the marketing
of its competitive strengths, such as no travel blackouts or reward
seat capacity restrictions.
In 2004, we ranked number one in the Canadian
mutual fund industry in total and long-term net sales and increased
our mutual funds market share by 13 basis points for total market
share of 9.54 per cent as at October 31, 2004. We crafted a strategy
for clients seeking to maximize retirement income by helping clients
optimize their deposit and investment mix and cash flow in the
face of low interest rates, which contributed to profitable growth
of our investment business while reinforcing client loyalty.
Clients recognize the value of our fee-based
wealth management services relative to traditional transactional
relationships as it helps to ensure alignment of the advisors’ interests
with their wealth management objectives. We maintained our leadership
position in fee-based assets among full-service brokerages in Canada
with $26.43 billion in fee-based assets under administration.
In 2004, we continued to expand our insurance
operations in Canada and the U.S., both through acquisition and
organic growth. In May 2004, we completed the acquisition of the
Canadian operations of Provident Life and Accident Insurance Company
(UnumProvident), a wholly owned subsidiary of UnumProvident Corporation.
Based on 2003 in-force premiums, this acquisition makes RBC Insurance
the leading provider in Canada of individual critical illness,
disability and long-term care insurance products – also known
as living benefits products. The UnumProvident deal also provided
us with a considerable position in group long-term disability insurance.
As a result of our acquisition of UnumProvident,
our life and living benefits distribution network has expanded,
with insurance products and services now distributed through more
than 17,000 independent brokers, up from 7,000 distributors prior
to the transaction. Integration of the UnumProvident business is
completed and we have launched regional resource centres in Vancouver,
Montreal and Toronto to serve this business. These centres include
75 insurance professionals and are focused on providing distributors
with superior sales support and service across the group, life
and living benefits product lines.
In Canada, we launched a new life insurance product, Foundational
Life, in January. This product offers clients the security
of permanent life insurance with the benefits of flexible investment
options. Clients are given an economical option for purchasing
permanent life insurance protection in a variety of amounts that
are lower than most traditional universal life insurance policies.
We have also introduced two new products to
meet the insurance needs of U.S. clients. RBC LevelTERM,
an enhancement of the RBC DirectTERM product, has four
available term periods and continues to offer extremely competitive
rates for tobacco users. This product is offered through Internet
quoting services as well as the RBC Insurance website (rbcterminsurance.com)
and leading term insurance aggregators. We also introduced Clarity
2+2 Variable Annuity, a versatile retirement planning vehicle
that combines the tax benefits of variable annuities with unique
features designed to satisfy short- and long-term financial needs.
In 2004, our home and auto insurance business
continued to grow as we expanded our group insurance program, enhanced
our online quoting capabilities and further improved our levels
of client service. We also enhanced the travel insurance product
and service options we offer to better meet the needs of travellers,
launched new travel insurance technology solutions such as an eTool
website for travel agents, and integrated our travel insurance
products into Softvoyage’s SAX web-booking engine, a technology
solution for tour operators, travel agencies and consolidators.
In addition, we extended our travel insurance distribution capabilities
to channels outside of our traditional network of travel agencies
to include brokers, online distributors and the RBC Insurance career
We are leveraging our Canadian leadership in
travel insurance to serve U.S. clients. We are now licensed to
offer travel insurance products in 48 states as well as the District
of Columbia. In addition, we signed agreements with key travel
agency organizations to become their preferred travel insurance
provider and in summer 2004, we were added to the Amadeus Travel
Assistance and Worldspan systems. Through these agreements, our
travel insurance products and services are now available to U.S.
travel agents through all major global distribution systems.
RBC Centura expanded its reach in the Southeast
U.S. through the opening of 21 branches and three commercial banking
centres in 2004. A significant proportion of the growth occurred
in the fast-growing regions of Atlanta and Florida – markets
where significant numbers of Canadians who are familiar with our
RBC brand live permanently or for part of the year. One of the
new branches includes a bilingual (English- and French-speaking)
banking location in Hollywood, Florida, which opened in February
2004. We plan to further optimize our branch network by continuing
to open new branches selectively in high-growth markets and also
by closing 10 low-return branches in 2005. A significant number
of “Snowbirds” (including vacationers from Quebec)
spend the winters in the Hollywood area. Each of RBC Centura’s
Florida branches now has a “cross-border” focused specialist
with expertise to meet the banking, mortgage and other borrowing
needs of our Canadian clients.
Supplementing this branch network, we launched
a proprietary North American Online Banking platform, leveraging
our Canadian Online Banking technology. This provides clients who
bank at both RBC Centura and RBC Royal Bank access to all their
accounts at the same time with a single sign-on, as well as the
ability to instantly transfer funds cross-border. This is the first
time in North America that this type of cross-border banking has
been offered by any institution.
From an operational perspective, we have almost
completed restructuring our technology infrastructure in the U.S.
to extend our client reach and capability, standardize operations
and realize greater efficiencies.
RBC Builder Finance, focused on residential
builder and construction financing, has also expanded its network,
opening three new loan production offices in Florida and Ohio in
2004. Its 35 loan production offices now serve over 90 markets
across the U.S.
Voyageur Asset Management, our U.S.-based asset
management company, formed through the strategic combination of
businesses from our Dain Rauscher Corporation, Centura Banks, Inc.
and Business Men’s Assurance Company of America acquisitions,
achieved a record US$25.4 billion in assets under management at
the end of fiscal 2004.
Across the U.S., RBC Dain Rauscher continues
to broaden its wealth management focus, with an emphasis on managed
money programs, new product development and enhanced training.
Wealth management is a comprehensive financial approach that anticipates
and adapts to clients’ ongoing needs through proactive planning.
During 2004, RBC Dain Rauscher provided managed money programs
to more than 3,786 new households, adding 9,692 accounts and US$2.9
billion in assets under administration. RBC Dain Rauscher ranks
as the eighth-largest U.S. wealth management firm by number of
We sought better ways to make our services accessible
to clients. We co-located RBC Centura and RBC Dain Rauscher employees
into our Global Private Banking Miami office, providing enhanced
brokerage capability and domestic banking services for international
clients who have U.S. connections. The move also strengthens our
ties to the Latin American community in Southern Florida – further
leveraging our 100-year history in the Caribbean and Latin American
Joint marketing of term lending between Global
Private Banking and RBC Dain Rauscher for high net worth clients
since the second quarter resulted in approximately US$100 million
in new loans being booked during 2004.
Increasingly, clients with international financial
needs view Canada and member companies of RBC Financial Group as
a safe and stable place for the management of their wealth.
In 2004, Global Private Banking opened new offices
in Madrid and Istanbul. We also recruited 10 new investment advisors
to cover new markets in Latin America – bringing the total
number of international Global Private Banking investment advisors
to 70, including private bankers and business developers in the
Middle East and onshore U.K. markets.