RBC CEO McKay Says US-Canada Ties Aren't Decoupling Despite Tariff Rift

Royal Bank of Canada CEO Dave McKay said the U.S.-Canada trade relationship is not decoupling despite tit-for-tat tariffs, as the bank leans on cross-border growth investments while building defenses against a sharper downturn. "We're investing in growth, not decoupling," McKay told American Banker, pointing to RBC's financing of oil and gas pipelines and an August launch of a Global Transaction Banking unit combining its U.S. and Canadian cash-management platforms. RBC's U.S. businesses generated $826 million in net income in the quarter ended July 31, about 19% of the lender's bottom line. McKay cited the USMCA, which runs until 2036, as a durable foundation despite the August 2026 collapse of negotiations and Prime Minister Mark Carney's call for reduced U.S. dependence. The optimism sits alongside caution: RBC raised credit-loss provisions 54% in May 2025 to guard against trade-war fallout, and analyst Stephen Boland of Raymond James said the bank is "definitely prepared for a worst-case scenario." City National, RBC's Los Angeles unit, posted $184 million in net income last quarter, up from $114 million a year earlier.