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A Royal Bank of Canada (RBC) sign is seen in downtown Toronto, March 3, 2011.Mark Blinch/Reuters


RBC sells insurance unit to Aviva for $582-million

Royal Bank of Canada is selling off some of its insurance business to a larger competitor in a move to offer customers more coverage while reducing risk.

Aviva Canada Inc. is acquiring an RBC division of home and auto insurance through a $582-million deal for RBC General Insurance Co. About 575 employees from RBC Insurance that handle underwriting, adjudicating claims and other activities will become part of Aviva under the agreement.

The two former rivals have also struck a 15-year arrangement allowing RBC to continue selling products under its existing brand name. RBC said its direct-to-consumer home and auto insurance business is growing, meaning more people are seeking insurance online and by phone, rather than calling a broker. This trend has been on the rise, particularly among younger customers, as the Internet and mobile phones play a greater role in the research and purchases of insurance. Story


A $2.7-billion garbage deal

Usually when two companies merge in a friendly deal, their management teams go on and on about the combination's benefits. Not so for Canada's Progressive Waste Solutions Ltd.

Even though its board unanimously approved the $2.67-billion (U.S.) merger with Texas-based Waste Connections Inc., it isn't quite clear what the Canadian company gets out of it.

Asked in a conference call on Tuesday about how the merger process went down and why he pursued the deal, Progressive chief executive officer Joe Quarin demurred, saying little more than to look to a coming corporate filing for more details. How inspiring.

The deal strategy is also coloured by the tax issue. Although it foresees cost synergies and better revenues, Waste Connections was not shy about its intentions to be domiciled in Canada, even though the combined company will be run out of Woodlands, Tex., where the buyer is currently based. The reason: a tax inversion. Story

Dundee sells retail brokerage arm to Euro Pacific

Dundee Securities Ltd. is selling its retail brokerage arm as it plans to shift focus to its alternative asset management and private investment counsel lines of business.

Dundee Securities, wholly owned by Toronto holding company Dundee Corp., said Thursday that Dundee Goodman Private Wealth will be acquired by Euro Pacific Canada in a deal that will see $3.5-billion in client assets move from Dundee to Euro Pacific.

"If you chase two rabbits, then you will likely see both of them escape, and while we love the retail brokerage channel, we decided we needed to focus on another segment of our business – the alternative asset management side – where we believe there is a lot of future potential," said Richard McIntyre, executive vice-president and head of Dundee Global Investment Management.

When the deal closes, Euro Pacific will increase its overall assets under administration to $4.2-billion and triple its overall adviser head count as 78 advisers move over from Dundee. Story


The next big thing for Canadian trading: inverted markets

The rapid pace of evolution in stock trading isn't letting up. Having already adjusted to algorithmic and high-frequency orders, Canadians are now bracing themselves for the rise of inverted markets and brokers are left to mull whether they should be in or out.

Historically, the trading world made money through spreads; traders would line up buyers and sellers and then take a 5-cent fee per share. The seller may have received $20 a share while the buyer would pay $20.05 – what was in the middle went to the investment bank.

As high-frequency trading and electronic trading grew, stock exchanges started experimenting with a new model that paid high-frequency traders to post orders on their marketplaces. Known as the "maker-taker" pricing model, traders who removed liquidity, or executed an order and removed it from the marketplace, had to pay a "taker" fee; traders who posted that order got a "maker" rebate.

That's still the dominant model for Toronto Stock Exchange-listed stocks, but there is incredible growth of a new system, known as an inverted market. It works in the exact opposite fashion. People who execute orders and remove them from the marketplace are given a rebate, while people who post orders have to pay to do so. Story


Maybe Scotiabank's problem is that it's Canadian

At Bank of Nova Scotia's investor day earlier this week, bank executives mentioned the four-nation Pacific Alliance a total of 68 times. The number of references to emerging markets? Just one – and it wasn't a compliment.

"Our international experience has taught us that not all emerging markets are created equally," Brian Porter, Scotiabank's chief executive officer, said in his opening remarks at the two-day event.

The choice of words says everything you need to know about the lender's pitch to investors: The bank's substantial international operations are focused on Mexico, Chile, Colombia and Peru, rather than all emerging markets.

The reason the lender would want to clarify its strategy is no mystery: Its ties with emerging markets are weighing on its share price, which lagged its big bank peers in 2014 and 2015. Shares are off about 30 per cent over the past 18 months. Story


JPMorgan to investment bankers: Work less

Bankers at one of Wall Street's biggest institutions got a strange directive on Thursday morning: Start taking weekends off.

In Wall Street's famously workaholic culture, that's a minor earthquake. JPMorgan Chase & Co. told its investment bankers that unless a deal is imminent, they're not expected to sacrifice their weekends to the firm, a bank spokesperson said.

The new policy, dubbed "Pencils Down," applies to more than 2,000 people working at JPMorgan's investment bank around the world, from lowly junior analysts up to managing directors.

The move is part of a slow shift by Wall Street to put boundaries on the demands made of its workers, especially younger ones. The early years of a career in investment banking have long functioned as a kind of hazing – 100-hour weeks, regular all-nighters poring over spreadsheets, weekends spent at the office – all in exchange for admission into an elite club.

But today's generation of workers isn't crazy about that deal – and the technology industry, which offers both high pay and quality-of-life perks, has emerged as a potent competitor for recruits. Story


REIT executive Michael Cooper's 'humbling' lesson

Michael Cooper doesn't mince words. By his own admission, the current commercial real estate environment is "grinding, painful and humbling."

Not even a decade ago, the Canadian real estate executive was elevated to sage status for timing the market so perfectly and scoring incredible returns for investors. Today, the biggest company in his empire is worth about half of what it was. Now everyone wants to know where it all went wrong.

Mr. Cooper's legend dates back to 2007. That June, just before the financial crisis, he sold two-thirds of his real estate investment trust's portfolio to GE Canada for $2.4-billion. Two years later, after waiting out the market turbulence, he bulked up the same company, Dundee REIT. The buying spree culminated with the blockbuster acquisition of Bank of Nova Scotia's Bay Street headquarters for a record $1.3-billion – the highest price ever paid for a Canadian office building.

As the REIT's market value soared, buoyed by seemingly insatiable investor appetite for yield, Mr. Cooper took two companies public. Shareholders happily piled in, believing in the industry's golden boy. Story

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