Ex-RBC CEO Gordon Nixon says ‘superstar’ banker a thing of the past

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The man who helped propel Royal Bank Of Canada into the upper echelons of global investment banking says the industry's best days may be in the past.

"There was a heyday for the capital markets business, and that heyday was probably somewhere between the mid-90s and pre-the crash," said Gordon Nixon, former chief executive officer of RBC in an interview.

"That was when you saw the explosion of firms like Goldman and Lehman, and in Canada, you had the bank-owned dealers and the boutiques. Since 2008, you've seen a lot of those businesses – some of them have disappeared – some of them have shrunk. The heyday of the industry has probably passed."

Mr. Nixon spent more than 20 years in investment banking, starting his career with blue-chip independent brokerage Dominion Securities Ltd. in 1979. When the firm was swallowed by RBC in 1987, he rose up the ranks, eventually becoming the head of RBC Dominion Securities Inc. In 2001, he was promoted to CEO of the entire bank.

At age 43, he was the youngest in RBC's history.

During his 13-year tenure at the top, the big bank's earnings grew from roughly $2-billion a year, to around $9-billion. A good chunk of that growth came from the capital markets business. Mr. Nixon invested particularly heavily in building out the bank's footprint in the United States.

The great financial crisis of 2008-09 while "a terrible thing" (for the world economy), ended up being a "fabulous thing" for RBC, Mr. Nixon said. The bank rocketed up the global standings, because of the demise of banks such as Lehman Brothers and the weakening of many other storied franchises such as Merrill Lynch & Co., and because of RBC's inherent stability.

"Going into the crisis, we were a top-50 bank in the world by market capitalization. After the crisis, we were a top-five bank," he said.

Postcrisis, a new era of investment banking was ushered in globally, that saw increased regulation put in place, tighter controls over risk-taking, and added scrutiny on compensation. In Canada, cultural changes took hold too on Bay Street, that saw some of the great "characters" move out of the business, and the cult of the personality fading.

"I would say that it's less about the individual and more about the organization and the team," Mr. Nixon said.

"The superstar trader, or the superstar banker, is something that is a bit of a thing of the past."

Since stepping down from RBC in August, 2014, Mr. Nixon has kept himself busy. He serves on a number of corporate boards including that of George Weston Ltd. and Blackrock Inc. He was also recently appointed chairman of BCE Inc.

Earlier this month, Mr. Nixon was inducted into the Canadian Business Hall of Fame, which recognizes lifetime achievement in business.