Name: CEO of Canada’s biggest bank says “empathy and transparency” are key to leading through coronavirus crisis
Uploaded: 2020-03-13
Duration: 6 min 46 s
Description: Royal Bank of Canada’s leader is confident “we’ve got the tools to manage the economy”

Royal Bank of Canada’s leader is confident “we’ve got the tools to manage the economy”

 CEO of Canada’s biggest bank says “empathy and transparency” are key to leading through coronavirus crisis

Leadership

He says empathy and transparency are key.

Royal Bank of Canada’s CEO leads through coronavirus crisis

gave Corona virus is topic ate all around the world, the financial markets have been selling off. What do you think that this severe financial response to this health care crisis is telling us? What's the message of the market methods or uncertainty about the future when you look at ah that markets in the price of of long term bonds and you look at US 10 year yield dropping below 50 basis points down the low forties telling But uncertainty about future growth, uncertainty about credit loss on the credit cycle, fear of recession, disruption on both the demand side and on the supply side in our economy, it's huge uncertainty and fear. You run Canada's biggest bank and you have a big presence here in the United States to so, from the point of view on the banker, tell us a little bit more about what measures you would like to see. Certainly there's monetary policy. Are there things that big businesses can dio U S and other governments that you'd like to see that would instill confidence for consumers and businesses? We have a number of tools that we can use to manage the economy through this We have a number of strategic backup plans of companies to help. People were had a different location, So as far as economical as you've still a monetary policy, you can have rate cuts. Hopefully, we don't go too negative rates, but you've got a significant chemist that you can still inject into the economy. You still have fiscal policy. We can run greater deficits. We could insert cash flow into consumers and small businesses and corporate pockets to continue the economy. We've got tools to manage the economy. At the same time businesses have backup operational plans continues. He plans to protect the safety and health of their employees to continue to manage operations. And you're seeing around the world, you know, companies execute those plans. There's a lot you can do, helping customers get ahead and understand their casual challenges, the options they have to refinance, helping consumers understand their challenges that they lose their job. You know, we have skipper paying our mortgage business when the customer loses their job cash flow disruption. You sit down and talk about their options of deferring payments, managing their cash flow, helping them understand all their short term requirements, apply technology and the advice of our people to really help understand the optionality to manage the challenge is, uh, declining economy can have on your business. You know, CEOs talk a lot about leadership, and how they lead in good times were also difficult times like we're going through right now as a business leader. What are you doing internally? What kind of steps are you taking during the healthcare risk time? You really can't over communicate and communicate with transparency. I think those are the two keys so written communication they need to see you visually. They need to see you in a calm state, articulate what's going on. Empathy. It's really important that the note I sent out to employees first thing this morning was, I feel with you about a personal concern to concern for your family the same time we have to move forward a society with the contain these risk. We have to continue to operate our economy and balance the two. So I think it's empathy and transparency. Well, until all of these virus concerns, your bank has been doing extremely well recently reported record earnings. The bank announced it is raising its dividend and you told investors quote, We're starting 2020 from a position of strength, which is great. But now, knowing what you know, what is your outlook for 2020? Well, certainly changed. You know, the first thing for a bank that changes the rate environment has decreased significantly and that impact our revenues. So we're adjusting to a lower revenue environment as an industry challenges your expenses and what you can spend and how much you can growth, certainly, and were challenged by customer demand. So you would think consumers with uncertainty by Les Hommes They take last trips for sure they use your credit card. Less small businesses might borough lesser Boram or depending on their cash flows, an inventory and supply chain. So all of that normal trajectory has changed around your customer and around the market doesn't change our strategy. We still have the same ambition to grow same ambition to serve customers. But in the short term, we have to help our customers and our employees get through this period of uncertainty. I think trying to balance both of the leader, which is key. So let's talk about your strategy. You have these expansion plans into the U. S. Market. You recently said that you plan to roll out a direct to consumer bank in the U. S. Tell us what you're thinking when we look at our strength and what we can help consumers. Within the United States, we have one of the largest balance sheets of any bank in the world. We have a double A rating balancing when the few double rated banks in the world. We have a very strong technology based, so we think about the value we can bring to a specific segment of the U. S. Market. We feel we have a strong offering in a direct to consumer bank. So initially, you'll probably start as high interest savings account that will morph into different aspects of value for every day. Consumers. So we're very excited about the technology and going direct to the consumer, and strategically, for us, it helps us fund future longer. So your first foray into the U. S. Was when you bought City National Bank and you've opened up branches not only New York and Washington from other cities. How is that going? And that's what motivated you to do this Consumer bank we've doubled the balance sheet. We double the loans in the business. We're now $50 billion bank and City national. We have aspiration to double it yet again to $100 billion bank. And we've grown by expanding our geography. We have a take New York strategy. We're gonna be in Hudson Yards. We're gonna be Westchester. We're doubling the size of our operation in New York City. Expanded into Washington, Nashville, Boston of Wall continued to grow our her home base, which is the state of California. Why is the U. S so appealing to you and RBC and why it's Canada, maybe less appealing when it comes to the growth opportunities US. Such a large market is one of the deepest peoples for banks in the world, the most competitive marketplace. So you have to really be at the top of your game. So, uh, for us, that presents opportunities. When we feel there's an unserved market here, there's room for us to compete and scale. We've probably had 2000 employees to the U. S. Operation over the last four years, were very excited about the future growth opportunities