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RBC Was Reacting to its “Attacker”

David-McKay-RBCCanadian banking head David McKay explained RBC’s recent rate moves to the Globe:

The rates coming down were in response to a very aggressive move by a competitor (BMO) and a need for us to defend our client base, and to defend our business. We didn’t lead it there, but we felt compelled to follow.

When that market attacker corrected and raised their rates, it enabled us to say funding costs are going up, we’re not making enough spread at this rate … and we need to raise pricing because the cost of funds is going up.

RBC certainly doesn’t need to justify its rate strategy, but it’s amusing to hear it refer to BMO like a viking marauder. BMO’s getting quite a scrappy little reputation.

Rob McLister, CMT