Royal Bank of Canada RY-T has announced a major leadership shakeup and divided its largest business unit as it integrates its takeover of HSBC Bank Canada.
RBC is splitting up its largest revenue-generating engine by segmenting the personal and commercial divisions as stand-alone teams. In March, the bank completed its acquisition of HSBC Canada, bringing in the lender’s sizable commercial lending and mortgage portfolios.
Dave McKay has been chief executive of RBC for a decade now – the typical tenure for a Canadian bank CEO. Analysts and investors have been watching senior leadership moves for succession clues at several of the country’s biggest banks, where few women have been positioned to take on the top job.
While Mr. McKay is not expected to step down in the short term, the changes signal the bank’s intention to test the capabilities of its executive bench and develop a successor.
“Although the exec changes may increase the speculation on CEO succession, we do not anticipate any immediate announcements on CEO Dave McKay’s departure,” Jefferies analyst John Aiken said in a note to clients.
After seven years as the head of personal and commercial banking, Neil McLaughlin will become the head of wealth management. Most recently, he assisted with the acquisition of HSBC, which added 780,000 clients in retail and commercial banking.
By splitting up the personal and commercial divisions, RBC has promoted two executives to oversee the separate businesses.
Erica Nielsen, executive vice-president of personal financing products, will become the head of personal banking. Since joining RBC in 2012, she has held roles spanning home equity financing, personal lending and client strategies, payments and personal savings and investments. Last year, RBC broadened her duties to include the bank’s U.S. and Caribbean banking divisions.
To lead its commercial banking division, RBC has tapped Sean Amato-Gauci, currently executive vice-president of business financial services. He joined RBC in 1995 and has held roles across personal and commercial banking, group risk management and finance. Mr. Amato-Gauci worked in a range of product areas, including consumer banking, credit cards, payments and home equity financing.
The bank said the changes, which take effect Sept. 1, are meant to position its leaders to make decisions faster and adjust to the larger business.
“The unique skills, experiences and perspectives they bring to the table will be invaluable as we embark on our next phase of growth and further deepen trusted client relationships across all our businesses,” Mr. McKay said in a statement Thursday.
As Mr. McLaughlin steps into his new role, RBC’s current head of wealth management and insurance, Doug Guzman – who has been in the role since 2015 – will become deputy chair of RBC, advising on company-wide priorities and helping manage relationships with some of the bank’s biggest individual, family, corporate, institutional and government clients.
The bank also named Jennifer Publicover, who is CEO of RBC Insurance, as group head of insurance, joining the executive leadership team. In a previous role as senior vice-president of products and strategy for wealth management, she assisted in the bank’s acquisition of British-based Brewin Dolphin, which created one of the largest wealth managers in the region. She joined RBC in 2017 after working in investment banking and capital markets at U.S. bank Morgan Stanley.
“Given our growth following the successful acquisition of HSBC Bank Canada and rapidly changing client expectations, we are taking the opportunity to review our structure and talent to simplify the way we work, better position us to take advantage of our scale, speed up decision making and elevate our leaders to deliver on strategic growth priorities with clients at the centre,” RBC spokesperson Gillian McArdle said in an e-mail.
In April, RBC fired chief financial officer Nadine Ahn after an employee complaint sparked an internal investigation that concluded she had had an undisclosed personal relationship with a colleague that resulted in promotions and pay raises.
RBC appointed senior vice-president, finance and controller Katherine Gibson as interim CFO while it conducts a search for Ms. Ahn’s replacement. The bank’s leadership reorganization announcement did not include any updates on its search for a new CFO.
“While we believe that the changes highlight RBC’s bench strength, we are surprised that there was no resolution on the bank’s CFO position in conjunction with the announcements with Katherine Gibson still retaining the ‘interim’ tag,” Mr. Aiken said.