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Gordon Nixon often gets asked whether Royal Bank of Canada will bulk up its struggling retail banking operations in the United States, or simply cut its losses and run.

On Tuesday, the chief executive officer of RBC offered analysts a bit of clarity on the matter. Though he refused to say whether RBC would be a buyer or a seller, Mr. Nixon suggested a decision won't be made soon.

Before he rules on the fate of the RBC Bank division based in Raleigh, N.C., Mr. Nixon said he will wait for those operations to return to a "more normalized" state.

With the U.S. economy struggling to recover, and the mortgage market facing strong headwinds, such a shift is unlikely to occur for a while, he indicated.

"In the short-term, our priority is to get the U.S. bank performing at a more normalized level," Mr. Nixon told analysts an RBC investor conference in Toronto. "We're not sure exactly what we would like to do longer term."

The bank has spent the past two years reorganizing the slumping operation and took a $1-billion writedown on the business in 2009. Some analysts have suggested RBC would be better off selling its U.S. branches than to invest further.

RBC sold its Liberty Life Insurance Co. business in the U.S. last year, but Mr. Nixon said that decision is not tied to the retail business. The liquidation of the insurance arm came after the bank figured it lacked the scale to be a serious competitor in that market.

Recent moves by Canadian banks in the U.S. have prompted speculation that RBC would add to its branch network as well. Since the downturn hit, well-capitalized Canadian lenders have been bargain hunting for banks south of the border.

Bank of Montreal agreed to buy Marshall &Ilsley in December, which broadens its retail network in Illinois and Wisconsin. That move followed a major expansion in Florida last year by Toronto-Dominion Bank, which bought three banks in that state.

RBC is considered a potential acquirer for Georgia-based SunTrust Banks Inc., since its branches fit well with the Canadian bank's U.S. footprint. However, Mr. Nixon indicated he is bearish on the U.S. market. "The retail banking market in the United States is a very stressed marketplace," Mr. Nixon said.

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