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Royal Bank of Canada CEO David McKay believes the Canadian housing market is in good shape.Darren Calabrese/The Globe and Mail

Royal Bank of Canada's chief executive has made it clear where his focus is right now: The United States.

In a press conference following the bank's annual general meeting on Friday, Dave McKay answered a question about the bank's commitment to developing markets – it recently withdrew from Suriname and Jamaica – by calling the U.S., Canada and Europe RBC's "core" markets.

But in his prepared remarks at the AGM, Mr. McKay underscored the importance of the United States in particular, raising the question of whether expansion could be in the works.

"We believe the U.S. economy will outpace Canada this year, and likely next, thanks largely to sustained employment growth, rising incomes and growing consumer confidence," he said.

Of course, these comments serve as a strong justification for RBC's recent $5.4-billion (U.S.) purchase of Los Angeles-based City National Bank.

"The combination of our two companies (which is subject to approval by regulators and City National shareholders) will be powerful, and will position RBC to expand significantly over the coming decade in the most attractive segment of the most attractive – and yes, competitive – financial market in the world," Mr. McKay said.

In contrast, his views on Canada were cautious at best. The drop in oil prices has led to a sharp decline in energy investment, he noted. He expects only moderate growth, driven by improving manufacturing activity and exports.

And then there's Canada's housing market. Like other bank chief executives, Mr. McKay sounds upbeat but his comments were peppered with notes of concern, such as this one: "Low rates and a limited supply of single family homes in some large markets are leading to price increases that bear watching, as we do expect higher rates over time to temper the market," he said.

Compare that comment to his glowing views on the United States: "The U.S. economy – whether it's in technology or energy or entertainment – continues to explore, experiment, create and re-invent itself in the 21st century," Mr. McKay said.

That doesn't mean RBC is working on more U.S. deals, but it does point to where the bank's priorities are.