Royal Bank of Canada (TSX: RY) (NYSE: RY) commented on recent intercompany sales of certain debt securities by its City National Bank subsidiary (“City National”). These sales were part of the management of City National’s securities portfolios.
This transaction will result in the recognition of realized losses at City National, which will be eliminated at the Royal Bank of Canada consolidated level. These realized losses will be reflected in City National’s regulatory Report of Condition and Income (the “Call Report”) for the three-month period ended September 30, 2023.
City National has reinvested most of the proceeds of this intercompany transaction in new securities for its liquidity and investment portfolio, which should benefit net interest margins.
In addition, an intercompany capital injection has been made into the City National subsidiary, further strengthening the capital and liquidity position of the subsidiary balance sheet, while also being used to pay down higher cost borrowing.
RBC will release its fourth quarter financial results and host an earnings conference call on November 30, 2023. Conference call and audio webcast details will be announced closer to this date.
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