We believe that the potential of the whole
organization to meet our clients’ needs is much greater than the sum of its parts.
Our clients are clients of RBC Financial Group – not just of
a single business line or location. That is why we have been working
to ensure that our businesses work together to serve our clients
In the middle of 2004, we began an intensive process
to examine all our operations and structures to better realize our
vision of “Always
right to be our clients’ first choice” for financial
services. Our thorough review focused on our client-oriented activities,
our functional support units and our technology and operations areas.
We found significant opportunities to increase our focus towards
client service and revenue growth and to streamline our organization.
We have successfully established our position
as a market leader in Canada and we have a growing and attractive
U.S. client base. Our new structure is designed to ensure that
RBC is built to anticipate and efficiently serve the distinct
needs of key client groups. We believe we can deliver superior
long-term revenue growth for our shareholders by better satisfying
our clients, earning their continued business, attracting new
clients and by delivering our services and products more efficiently.
Effective November 1, 2004, our five prior business
segments were realigned into three segments structured around holistic
client needs and geographic locations:
- A Canadian personal and business segment, which combines
our Canadian banking, investments and global insurance businesses,
including Canadian, U.S. and international insurance operations.
This business is led by Jim Westlake.
- A U.S. and international
segment, which includes banking and investments in the U.S.,
banking and brokerage in the Caribbean, and Global Private Banking
internationally. This business is led by Peter Armenio.
- A global
capital markets segment that includes corporate banking, which
serves corporate and larger commercial clients. This business
is led by Chuck Winograd.
We believe these changes set the foundation for revenue growth and
enhanced efficiency. Focusing our insights around the unmet needs
of various client groups will accelerate our product and service
model innovation. We will have simpler and faster processes for everything
from product development to credit approval, from how we resolve
problems to how we execute client instructions.
We are streamlining our corporate functions, technology
and operations area without compromising service quality and risk
control. We expect that these streamlined areas will improve our
cost structure and provide an enhanced quality of service to help
our businesses reach their sales and client service goals. By more
closely aligning functional and operational support to our businesses,
we expect to lower delivery costs and increase quality and flexibility,
while supporting business growth. Critical changes to our corporate
- Consolidating responsibility and accountability
for strategy, and all corporate functions, including risk management
and finance, under Barbara G. Stymiest in the newly created
role of chief operating officer reporting to the president and
chief executive officer.
- Creating a global technology and operations
group led by Marty Lippert to integrate all our operating and
systems capabilities. This will allow us to develop technology
solutions more effectively and process client and business services
more efficiently. This group has global responsibility and accountability
for our combined operations and technology and will look to optimize
economies of scale, IT platforms and best practices through the
establishment of centres of expertise to align common activities
We are focused on rolling out elements of our Client First Initiative
as quickly as possible. In the fourth quarter, we eliminated a number
of executive and senior management positions, commenced streamlining
resources, and took actions to close redundant premises. We expect
the majority of the remaining staff and occupancy cost reductions
to be completed during 2005. The more complex technology initiatives
will likely yield results in 2006 and 2007.
Our new structure is intended to result in an
efficient head office that can support distribution networks and
motivated sales forces with better products and greater innovation.
We believe that as a result of the realignment, we will record better
revenue growth performance and expense control in Canada and the
United States and have accordingly established more aggressive financial
objectives for 2005, set out on page 7.