RBC shock firing of CFO comes at crucial time for Canada's largest bank
The sudden exit of Royal Bank of Canada’s chief financial officer comes at a “critical juncture” for the lender as it tries to absorb the biggest acquisition in its history, a leading Wall Street analyst says.
Canada’s largest bank fired CFO Nadine Ahn on Friday, saying she’d violated its code of conduct by having an undisclosed “close personal relationship” with a colleague who was given preferential treatment, including promotion and pay increases.
The news landed barely a week after Royal Bank closed its $13.5 billion purchase of HSBC Holdings PLC’s Canadian assets, including its portfolio of commercial loans, mortgages and more than 100 branches. On top of the “ambitious integration” of those two entities, Royal Bank has been trying to rein in costs and improve risk controls at its Los Angeles-based City National subsidiary, Jefferies Financial analyst John Aiken said.
“Given the importance of the CFO role in managing operational efficiency, we believe that there will be an even greater investor focus on the HSBC integration and improvements in City National’s operations,” Aiken said in a note to clients published Sunday.
“We maintain that the following several months are a critical juncture for the bank and the loss of a key senior executive team member at this time is a material loss, regardless of the pedigree of her successor.”
Royal Bank said it sacked Ahn and the other employee, whom it didn’t name, after an internal review and an investigation by outside legal counsel.
Other market watchers said the departure may dent Royal Bank’s reputation but is unlikely to drag the lender down in a major way. The shares closed up 0.6 per cent on Monday at $139.95 in Toronto, better than the 0.3 per cent gain for the
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