City National Bank: Growth and Services

Introduction

City National Bank is a US financial institution based in Los Angeles. It is known for its banking services it offers for both local and international businesses in the USA and around the world. The bank offers complete complement of banking, investment and trust services in its 75 offices that also include sixteen regional centers located in Southern California, New York City, Nashville, San Francisco Bay, Atlanta, and Nevada. Following the closure and the merger of several banks in Los Angeles, City National Bank has emerged to be the largest bank in Greater Los Angeles Area. It also functions as processing bank meant to provide back office services such as checking clearance services and account processing for smaller banks without their individual processing systems. City National Bank offers real estate financing, working capital financing, and equipment financing among others. These works have attracted attention from media making receive a nickname, “bank of the stars” (Reckard, 2011). Its activities are regulated by comptroller of the US currency working in the State Department of Treasury. City National Bank has made significant progress in recent past characterized by expansion through mergers, international banking for big businesses, online banking and corporate social responsibilities; hence, it is important to delineate the key features marking these developments.

Trust Services for Small Businesses

CNB provides a consultative approach to firms with customized investment and trust solutions for successful municipal agencies, entrepreneurs, and corporations. These include building holding escrows, retirement services, and liquidity management. The corporation is highly upheld for its innovative ideas as well as reliable face-to-face service, trust and investment professionals who are resourceful in dealing with difficult issues in management. Even philanthropic organizations such as Non-governmental organizations (NGO) offers exceptional services and guidance such as investment, trustee, administration and financial management so that it can properly accomplish its goals.

Multiculturalism

The bank has shown massive commitment to vibrant diversity in its workforce, seeking to employ workers from all experiential and cultural backgrounds. The existing wide variety of perspectives fills the workplace and ensures ability to serve needs of communities and clients. In its strategic multicultural initiative, City National Bank seeks to be the bank of choice for clients from all cultures as well as the best employers ever for its financial service professionals and life experiences it offers. Consequentially, it is inclusive in its dealings. City National Bank is focused on building connections internally and externally. This starts by workplace practices. The bank employs people rich in talents and passionate to give back to society. Members of the bank also serve in a number of volunteer positions, seeking strategic community as well as partnerships. To foster internal professional development amidst workforce and enhance external networking, the organization creates caucus groups to reflect on its diverse client base and colleague population.

Diversity is crucial in business. With attention to diversity, the bank can manage to extend its roots to many places in the world because it is free of degrading issues such as discrimination, prejudice, and racism. This attracts customers as well as investors who feel incorporated in activities of the bank. As a result, the financial capacity of the bank would definitely increase. The members of the bank stay at the front of leading efforts in business development focused on empowering individuals, organizations, and companies. They also reach out to organizations operating within communities where they help in offering financial services as well as opportunities for volunteering, help in recruitment of talented professions by joining hands with human resources to attract identity and retain candidates. Additionally, groups created by the bank help in guidance and implementation of internal programs for expansion of opportunities for leadership development and career, including educational career, formal mentoring program, and leadership development series (Reckard, 2011).

Merger with Royal Bank of Canada

Royal Bank of Canada merged with City National Bank with the intention of creating a powerful platform to fashion a long-term growth in the United States of America. It was a key milestone as it had created a leading organization in both private and commercial banking as well as wealth management. It combines capabilities that deepened relationships with clients and pushed towards serving a broader client base. City National Bank aims at becoming the most preferred service provider in the USA to institutional, corporate, commercial, and clients of high net worth. Ultimately, the bank’s strategy is based on helping its clients move forward, building proper communities, and ensuring success of its employees.

Considering the closing price of shares in New York Exchange, on October 30, 2015, the price of common shares of City National Bank was US$ 56.83 (CNC, 2015). City National combined its wealth management unit with RBC and put under one management in the USA. It put together clients’ assets of US$336 billion in asset and wealth management (CNC, 2015). The merger is significant, as it would create new opportunities through the US capital market business and wealth management. This combination ensured that clients of Royal Bank of Canada, entrepreneurs, business owners, companies and families gained access to City National Bank’s excellent produces, colleagues, and services. It is also important to note that it has ensured strong commitment to many areas in community for example, youth affairs, education, small business, economic development and affordable environment and housing (Reckard, 2011).

Acquisition

City National Bank has made significant acquisitions in the recent past. One of the major ones is agreement to acquire Rochdale Investment Management, a New York City investment firm worth $4.8 billion managing assets for high-net and affluent clients, and this acquisition brought total assets and wealth managed by City National Corporation to $60 billion (CNC, 2015). This made it a part of most admired wealth managers in America and ranking number 26 in Bank.

Sustainability and Development in America and the Middle East

City National Bank considers communities as its most important assets since they form the greater part of the organization’s external environment. City National Bank is focused on creation of brighter and future environment through green business practices. Its plans are geared towards protecting natural resources in American and the Middle East. This forms core part of its business agenda. It is fully committed to growing its business operation in environmental sustainable ways apart from just creating healthy environment for its employees and clients. The Bank recognizes steps that it has to take to minimize impact on the environment for the sake of future generations. It has formed Green Ladder Council made up colleagues and executives across its departments responsible for spotting opportunities in various places to establish and operate projects to conserve green buildings and environment. The bank supports agendas coined by Green Ladder Council by setting a number of goals pointed towards sustainability in environment. They include tracking and mitigating carbon footprint produced by the bank, increasing use of renewable resources, and creating healthier environment for clients and community at large.

There are real examples of achievements of City National Bank in its drive to sustainability. They include a water treatment system built in City National’s Operations Centre. The plant help saves at least one million gallons of water annually. At Riverside location, solar panels have been constructed to save more than 77,000 kWh each year. An automated system that shuts down all computers thus saving more than 1.2 million kWh per year was also launched in 2014 (CNC, 2015).  Lastly, the company upgraded air conditioning in two locations to save about 164,000 kWh. The new recent renovations and construction in the organization are specifically made to increase availability of natural lighting in special windows and offices as well as tinting to reduce heat gain.

Quarterly Earnings

The organization reported a record-breaking net income of $71.8 Million in 3^rd quarter this year (CNC, 2015). It is the first time in history of its creation in 1954 that the value of assets reached $35.6 billion while loans registered a significant growth from 16% to $22.5 billion (CNC, 2015). On the same note, deposits increased from 12% to $31.2 billion (CNC, 2015). Earning for a single share was $3.32. This is a 5% increase compared to $3.15 in the first 9 months of 2014 (CNB, 2015).

Lease balances and loans, excluding received impaired loans, registered a growth to $22 billion, representing 17% from 2014 (CNC, 2015). The loan balance at the end of this financial period increased to $22.5 billion, an increase of 16% from 2014 and 3% increase from the second quarter of 2015 (CNC, 2015). Deposit balances reached an average of $30.1 billion, an increase of 12% from 2014 (CNC, 2015). Income from trust and investment fee summed up to $58 million, a 2% addition, and total assets under management totaled to $46.3 billion, a 6% reduction from 2014, excluding impaired loans but including $6 million reverse allowance for lease and loan losses (CNB, 2015).

The above figure depicts growth in deposits, assets, and loans twice the rates demonstrating how the company has been effective in succeeding to add clients. The company registered a solid growth in all areas such as deposit formation and credit quality. Higher noninterest expense in the financial period was driven by company’s investment into the future, more so additions of personnel. The quarter was strong, making the bank profitable in consecutive 90 quarters. According to Bank’s CEO, merger with RBC is a special complimentary combination that would ensure not only excellent value to its shareholders but pave way for great opportunities as well as enhanced capabilities for communities, employees, and clients (CNB, 2015). The merger would be instrumental in enabling the bank to focus on being able to meet all the financial needs of its professionals, families, businesses, entrepreneurs and investors (Reckard, 2011).

International Banking Online

City National Bank enables companies to keep pace of the faster international businesses through its online applications. These include electronic notifications, customized reports, real-time, online preparations, and comprehensive histories of transactions. From exporting motherboards to importing metals or playing the role of a middleman, the Foreign Trade Bankers working in City National are familiar with risk reduction that expedite transactions and fund businesses across the world. By streaming clients’ businesses as well as international banking activities, the company helps make swift decisions, monitor volatility of foreign exchange market, and manage liquidity (Reckard, 2011).

International Banking for Businesses

City National Bank is relatively small but it has managed to compete globally. In respect to international business transactions, the bank facilitates wire transfers. In currency management, CNB manages risks in foreign markets by supporting major currencies with array of services such as financial analysis and hedging strategies. Other services include foreign currency deposit accounts, trade services and export finance for goods and services originating from the USA to be competitive well on international marketplace (Reckard, 2011). CNB is helpful to businessmen in foreign currency services. It is instrumental in eliminating the need for a person to search for unknown facility to exchange currencies abroad. They also offer fair rates, allows use of cash to prevent international service fees related to use of cards on smaller purchases, and provide useful information to clients about accepted currency in various destinations. The company boasts about providing exclusive attention to customers to leave a stress free life as far as financial matters are concerned.

Conclusion

Generally, this discussion reveals the evidence and features of progress made by City National Bank in becoming of the most admired organizations. City National Bank is one of those corporations that have stayed relevant to the market needs in terms of banking and offering financial services to individuals, communities, and companies. Despite there being a number of areas that need improvement to widen the bank’s influence and customer base across the world, it is beyond that it is on the right course.