AI won't replace junior bankers, RBC insists, as it ramps up its grad hiring
Royal Bank of Canada was the only Canadian bank among the 23 firms underwriting the SpaceX initial public offering, and it served as a joint book-running manager on Alphabet's US$84.75bn equity raise.
According to Bloomberg, the bank is pushing to expand in a market it calls its "second home."
RBC Capital Markets already dominates in Canada and earns half its revenue in the US, yet it sees more room to grow, group head and chief executive officer Derek Neldner told Bloomberg.
The division has added 205 people in the US over the past seven months, including 23 managing directors.
"We're very much in growth mode. We're looking to hire, we're increasing our hiring," Neldner said.
A March report from Bank of Nova Scotia analyst Mike Rizvanovic said the unit's scale and broad mix across trading, corporate and investment banking have kept revenue volatility low.
That makes RBC a good defensive stock to own for investors if a market slowdown hits in the coming quarters.
Division net income has roughly doubled under Neldner since 2019, according to Bloomberg.
He credits a "robust external environment" and heavier investment in recruiting, technology and a 2024 US cash-management launch.
On US investment banking, "we're adding across the board," Neldner said, naming technology, healthcare, industrials, and financial institutions as priority sectors.
RBC is also expanding its US trading desks across equities, credit and macro products such as foreign exchange, rates and commodities, Bloomberg reported.
The push into technology deals followed years of groundwork.
About five years ago, RBC brought in industry veteran Kirk Kaludis to lead technology investment banking from San Francisco, and later hires strengthened ties with larger-cap tech names, Neldner told Bloomberg.
He called it "a good example of where we've been building the team and building the capabilities."
RBC has also leaned on its domestic strength to help global clients raise Canadian-dollar debt, co-leading record-setting maple bond issues by Alphabet and Amazon.com Inc.
Neldner said large financings push issuers to "access global capital pulls," and that RBC's edge is pairing "global capabilities" with "leading capabilities in Canada."
On hiring, Royal Bank is on pace to take on about 3,600 new graduates in fiscal 2026, with RBC Capital Markets accounting for 330 new grads and more than 450 summer students, the bank told Bloomberg.
"AI is not going to replace junior bankers," Neldner said, adding that he expects junior hiring to rise each year. "Maybe it will slow the number of people we have to hire, but it's not going to stop our hiring."
AI is already lifting productivity, most clearly in research, where the average analyst now covers 17 stocks, up from 15.
Through its proprietary Aiden platform, RBC is piloting tools for meeting prep, first-draft investment-banking pitches and Excel modelling, while trading-desk staff use AI to analyze client data and build bespoke structured products, Bloomberg reported.
RBC's US drive mirrors moves by rival Canadian lenders.
TD Securities accelerated its US growth in 2022 by agreeing to buy New York-based Cowen Inc. in an all-cash deal worth US$1.3bn.
Both RBC and TD have since joined the underwriter network of Capital Markets Gateway, a fintech that modernizes equity-capital-markets workflows, with TD signing on in December 2025.
