Royal Bank of Canada’s capital markets chief says that even after two decades of expansion in the U.S., the country remains its biggest opportunity for growth.

RBC Capital Markets sees the potential to boost its market share in the U.S. from its current level of about 2.5 per cent to as much as 4 per cent over time, Chief Executive Officer and group head Derek Neldner said in an interview. While that won’t happen overnight, “clearly the U.S. is still our primary focus,” he said.

“On one hand we’re advanced because we’ve been at it for 10 to 20 years; on the other, I think there’s still a tremendous opportunity for growth,” Neldner said Tuesday, following the first day of the bank’s global financial institutions conference.

A particular focus for the firm, which already is in the top 10 in the U.S. in terms of wallet share, will be to diversify the U.S. platform by adding more advisory and equity capital markets capacity, said Neldner, who took over as the division’s head in November 2019.

RBC Capital Markets had the strongest performance among Toronto-based Royal Bank’s major divisions in its most recent fiscal year, boosting profit 4.1 per cent to $2.78 billion (US$2.2 billion) in the year ended Oct. 31. The gain was driven by a boom in trading as well as increased revenue from corporate and investment banking. The investment banking business alone has generated more than $1 billion in revenue for four of the past five quarters.

Trading and equity capital markets activity will remain elevated but normalize somewhat this year, Neldner said. Mergers and acquisitions work should pick up as companies look to strategically reposition themselves coming out of the coronavirus pandemic, he said.

SPAC Market

The market for special purpose acquisition companies, or SPACs, also will remain strong, Neldner said. He said RBC Capital Markets is approaching the business “selectively” and keeping high standards for the management teams it will engage with, Neldner said.

Last year saw 296 SPACs raise about US$84.7 billion globally, more than five times the dollar volume of a year earlier, according to data compiled by Bloomberg. Already this year, 248 SPACs have raised US$76.8 billion.

RBC Capital Markets is ranked 14th globally in SPACs this year, working on eight deals. That already tops the six deals the firm worked on last year, when it finished 21st in the category.

The firm has advised on transactions including online payments firm Paysafe Group Ltd.’s US$9 billion deal in December to go public by merging with a blank-check firm led by billionaire Bill Foley.

Most of the SPACs that already have been raised will be able to find an appropriate acquisition target since the vehicles have essentially become an extension of the market for later-stage startup financing, said Venkat Badinehal, managing director and head of RBC Capital’s financial institutions group in the U.S.

“As long as the market remains constructive,” Badinehal said, “we think you’ll see a greater amount of the capital that was raised being able to find a constructive target.”