RBC job cuts to remain modest

Restructuring to take 3 months

Staff WriterJune 18, 2009 

— RBC Bank has eliminated fewer than 20 jobs in an ongoing effort to restructure its struggling business, but the changes aren't expected to generate "any significant level of job cuts" in the future, according to a top executive with its Canadian corporate parent.

Although some additional job losses are inevitable, "at its core, this isn't a program to reduce people and cut staff," said Jim Westlake, who heads international banking for Royal Bank of Canada, the largest bank in Canada.

The goal is to make the bank more efficient and position it to prosper when the economy turns around, Westlake said Wednesday during an interview in a conference room at RBC Bank's downtown Raleigh headquarters.

"Over the last number of years, we have acquired banks, we have acquired businesses, we have changed as a company," he said. "We thought that the timing was really good to go through one of those exercises where you start at the top and look at all your roles."

RBC Bank has 430 branches across the Southeast and more than 5,000 employees, including more than 500 in the Triangle. In recent years, the bank has tried to bolster its brand in this market, buying the naming rights to the sports and entertainment center in Raleigh, and last year moving its headquarters into a new skyscraper that is one of downtown Raleigh's tallest.

But the company recently began revamping its operations after several quarters of losses that have weighed down the performance of Royal Bank, which recently reported its first quarterly loss since 1993.

The jobs already cut were in Raleigh and Alabama, with the majority in Alabama, Westlake said.

At the same time, RBC Bank also is hiring executives to fill positions created or revamped as a result of the restructuring. "The roles we are hiring for didn't exist in their current form," Westlake said.

The job openings include president, a new role, as well as a reconfigured chief financial officer and a senior vice president of technology and operations.

Among the recent departures was Chief Financial Officer Terry Early, who has retired. "A mutual decision was arrived at that it wasn't the right fit at the right level for Terry," Westlake said.

The restructuring will take about three months, Westlake said. "The idea is, you do it layer by layer through the organization," he said.

Other topics Westlake discussed:

CEO SCOTT CUSTER: "He's doing a good job. ... He is the guy in front leading [the restructuring]. He is putting a lot of miles on these days." Despite RBC Bank's losses, Westlake is committed to retaining Custer.

"If we were to fire every banker in the U.S. who was losing money," Westlake joked, "the unemployment line would be a long one."

RBC BANK'S LOSSES: RBC Bank is performing at or near the level of its peers in many key areas. Its sore spots have been its banks in Florida, where the real estate market has been especially hard hit, and RBC Builder Finance, "which isn't really part of the banking operation."

RBC Builder Finance was making loans to homebuilders in 17states until last year, when it was folded into RBC Bank, and its operations were scaled back to seven states. Royal Bank owned RBC Builder before it acquired Centura Bank, the precursor to RBC Bank, in 2001.

EXPANSION: "We're not in a big hurry to make any more acquisitions," Westlake said. "The good news" is that last year's purchase of Alabama National Bancorp's 103 branches gave RBC Bank sufficient scale that acquisitions aren't a must.

LONG-TERM PLANS: "RBC is committed to this market," Westlake said.

david.ranii@ newsobserver.com or 919-829-4877

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service