![]() ![]() The source of information used for this rating includes Royal Bank of Canada. The applicable methodology is the Global Methodology for Rating Banks and Banking Organizations (June 2012), and the following criteria: Rating Bank Preferred Shares and Equivalent Hybrids (June 29, 2009) and DBRS Criteria: Intrinsic and Support Assessments (February 11, 2009), which can be found on our website under Methodologies. The deal is subject to closing conditions, including regulatory approvals, and is expected to close in the first calendar quarter of 2013.Īll figures are in Canadian dollars unless otherwise noted. The Basel III common equity Tier 1 ratio is estimated to decrease by approximately 30 to 40 bps immediately following the close of the acquisition, but to remain in excess of 8%. The transaction is expected to generate earnings in the first 12 months after closing of $120 million after tax (excluding integration costs, amortization of intangibles and transaction costs, which are expected to be approximately $50 million). The net investment for RBC is $1.4 billion after deducting excess capital.Including the excess capital, and subject to certain closing adjustments, will result in total consideration of approximately $3.1 to $3.8 billion, depending on the dividend taken out by the seller prior to closing. RBC has indicated the credit quality of the loans at Ally Credit Canada is similar to that of its own auto loan portfolio. Integration risk is manageable given RBC’s experience with automotive floor plan financing and consumer auto lending, as it currently has over 300 dealer relationships and approximately $14 billion in receivables. DBRS views Canadian Banking as a key strength of the Bank. Ally Canada also provides the Canadian Banking business with a different channel to distribute its products, as well as potential cross-selling opportunities. Ally Credit Canada has approximately $9 billion in auto loan receivables. The transaction is consistent with RBC’s stated strategy of being a leading provider of financial service in Canada, as the acquisition extends the Bank’s position to become the Canadian leader in auto finance. No rating actions follow as a result of this announcement. (Ally Canada), consisting of Ally Credit Canada Limited and ResMor Trust Company. Make one-time or set up recurring payments with Auto Pay. DBRS has today reviewed the announcement made by Royal Bank of Canada (RBC or the Bank) that it will acquire the Canadian auto finance and deposit business of Ally Financial Inc. Easily manage your account with on-the-go access to our enhanced features. Ally Banks savings account comes with tools that make saving for financial goals simple. ![]()
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