Last month it emerged that Royal Bank of Canada was looking to get out of US retail banking. Although a bank spokesman would not comment, analysts and bankers say that RBC is exploring options for its US banking franchise, which has about $95 billion in deposits. Canadian peer TD Bank, which had aggressively acquired US banking operations during the crisis to become the eighth-largest bank by deposits in the US, has also halted its expansion there. HSBC is looking to sell its upstate New York branches, and Spanish banks Santander and BBVA, which had been expanding in the US, are also now quiet as they tackle domestic problems.
During the financial crisis, foreign banks stepped in to buy up struggling US banks or to expand operations, taking advantage of the fact that the large US retail banks were having to cut back or were restricted in making acquisitions. The US retail market had been difficult for foreign players to break into, and the crisis seemed to open the door to competition from abroad. But, says Brian Foran, managing director and senior bank analyst at Nomura: "Many of the foreign banks have had trouble making it work."
