RBC Halves Prop. Trading Activities

Dec 5 2014 | 1:51pm ET

The Royal Bank of Canada continued the exodus from proprietary trading to come into compliance with the looming Volcker rule.

The bank exited about half of its prop. trading strategies, it said. RBC Capital Markets, the unit that housed the trading desks, reported some US$40 million in costs and lower revenues stemming from the move.

“We’re well advanced in restructuring our proprietary-trading activities in the U.S. to comply with the Volcker rule,” CFO Janice Fukakusa said this week. “We’ve exited about half the trading strategies, we’ve transitioned market-making strategies into our agency-trading business and we are restructuring our remaining strategies to comply.”

RBC had been mulling a spin-off of its U.S. prop. trading business as a stand-alone hedge fund, but abandoned the plan in October. Instead, it has transferred some of the desks’ positions to other units and sold some credit investments.s

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