RBC completes acquisition of Ally's Canadian automotive finance business
TORONTO, Feb. 1, 2013 /CNW/ - Royal Bank of Canada (TSX:RY) (NYSE: RY) today announced it has completed the acquisition of the Canadian automotive finance and deposit business of Ally Financial Inc. ("Ally Canada") for a $1.4 billion investment net of excess capital. Including the excess capital and after certain closing adjustments, the total consideration paid was $3.7 billion. The acquisition positions RBC as a leader in the Canadian automotive financing business.
"Ally Canada significantly expands the scope and capability of our existing consumer and commercial auto financing business and we're encouraged by the positive response from dealers who want to continue building their business with RBC," said Dave McKay, Group Head, Personal & Commercial Banking, RBC. "We've gained a quality and stable business with strong industry relationships that creates a leading auto financing business in Canada."
The Ally Canada team joins the existing RBC team to form RBC Automotive Finance, a part of the Personal and Commercial Banking segment of RBC. It provides financial services, including floor plan financing, directly to auto dealers and also offers financing for consumers through dealerships.
Building on its commitment to the automotive business, RBC is now a partner with General Motors of Canada to provide subvented loans to its customers, adding to the bank's existing agreements with other leading auto manufacturers. Subvented loans are low rate consumer auto loans subsidized by the manufacturer.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. We are Canada's largest bank as measured by assets and market capitalization, and among the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, investor services and wholesale banking on a global basis. We employ approximately 80,000 full- and part-time employees who serve more than 15 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 49 other countries. For more information, please visit rbc.com.
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Certain statements contained in this press release may be deemed to be forward-looking statements under certain securities laws, including the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. These forward-looking statements include, but are not limited to, statements about the expected impact of the acquisition of the Canadian automotive finance and deposit business of Ally Financial Inc. by Royal Bank of Canada and other statements other than in relation to historical facts. Forward-looking statements are typically identified by words such as "believe", "expect", "foresee", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "should", "could", or "would".
By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions and other forward-looking information, including statements about the acquisition of the Canadian automotive finance and deposit business of Ally Financial Inc. by Royal Bank of Canada will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors include, but are not limited to the impact of changes in the laws and regulations regulating financial services and enforcement thereof; general business, economic and market conditions in Canada, the United States and certain other countries in which Canada and Ally Financial Inc. operate; the effects of competition in the markets in which Royal Bank of Canada and Ally Financial Inc. operate; judicial or regulatory judgments and legal proceedings; Royal Bank of Canada's ability to complete the integration of the Canadian automotive finance and deposit business of Ally Financial Inc. successfully; and other factors that may affect future results of Royal Bank of Canada and the Canadian automotive finance and deposit business of Ally Financial Inc. including timely development and introduction of new products and services, Royal Bank of Canada's ability to cross-sell more products to customers and technological changes.
We caution that the foregoing list of important factors is not exhaustive. Additional information about these and other factors can be found in our 2012 Annual Report to Shareholders. Our material general economic assumptions underlying the forward-looking statements in this press release are set out in our 2012 Annual Report under the heading "Overview and Outlook" and for each business segment under the heading "Outlook and priorities". Except as required by law, Royal Bank of Canada assumes no obligation to update the forward-looking statements contained in this press release.