After 13 years at the top, Royal Bank of Canada chief executive officer Gord Nixon will retire next summer.
Dave McKay, currently the head of personal and commercial banking, has been named the new CEO.
As part of the management shuffle, RBC announced that Mark Standish, currently co-head of capital markets and investor and treasury services, will leave RBC next year. Doug McGregor, who currently co-chairs both groups with Mr. Standish, immediately takes full control.
“When we presented our five year strategy to the board this summer, it was clear to me that someone else should take the lead,” Mr. Nixon said on a conference call.
“I do believe that succession is one of my primary responsibilities and it is time to pass the baton.”
Mr. McKay just turned 50, Mr. Nixon noted, and he is at the right stage of his career to hopefully have a 10-year run.
“Gord has had a remarkable career at RBC and during his 13 years as CEO earnings and market share have increased significantly in RBC’s five business segments both in Canada and internationally,” board chair David O’Brien said in a statement.
“He led our organization to strong earnings growth during the most challenging financial crisis since the Great Depression and transformed the bank by putting the client first and fostering a culture of collaboration across the organization for the benefit of all stakeholders,” said David O’Brien, Chair of the Board.”
Mr. O’Brien is also retiring, a move that was announced earlier this year. Katheleen Taylor has already been named RBC’s new chair.
The CEO transition coincided with the release of RBC’s fourth-quarter profit, which extended the bank’s streak of blockbuster earnings in 2013.
RBC, Canada’s largest bank, made $2.1-billion, or $1.40 per share in the fourth quarter up 11 per cent from $1.9-billion, or $1.25 per share in the same period of 2012.
RBC’s earnings growth was just as strong for the full year, climbing 12 per cent to a record profit of $8.4-billion.
Personal and commercial banking growth cooled last quarter, rising 5 per cent from the year prior, but still amounted to $1.1-billion. RBC was affected by rising provisions for credit losses in its Canadian and Caribbean loan portfolios.
Credit provisions also impacted wealth management, where earnings were flat over the year prior.
Capital markets, however, was a bright spot, with profit jumping 15 per cent to $472-million on stronger corporate and investment banking revenues and healthy loan syndication in the United States.
RBC preannounced the hit to its insurance arm last month. The $160-million charge stemmed from proposed federal legislation that will impact the tax treatment of certain types of individual life-insurance policies. The unit made $107-million for the quarter, down 45 per cent from last year.