(Reuters) – Royal Bank of Canada (RBC) on Friday said it had injected capital into City National to strengthen its subsidiary’s liquidity position and pay down the higher cost of borrowing.
The bank, however, did not disclose how much capital it has injected into the unit.
“This is part of the management actions that RBC is taking on the path to improving profitability at City National” an RBC spokesman told Reuters.
While announcing its third-quarter results last month, RBC had said that it planned to cut about 1,800 jobs to reduce costs and it warned of a softer economy ahead.
Banks have been trying to bring down rising costs amid a higher rates environment. This has affected their profits, making them to deploy more capital and cut jobs.
The bank also said recent intercompany sales of certain debt securities by City National will result in the recognition of realized losses at the unit, which will be “eliminated at the Royal Bank of Canada consolidated level”.
(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Maju Samuel)