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ROYAL BANK OF CANADA AND ROYAL TRUSTCO ANNOUNCE AGREEMENT IN PRINCIPLE

 TORONTO, March 18 /PRNewswire/ -- Royal Bank of Canada (Montreal Stock Exchange: RY) and Royal Trustco Limited announced today the signing of an agreement in principle whereby Royal Bank would purchase Royal Trustco's Canadian and international operating subsidiaries.
 At Dec. 31, 1992, the businesses to be acquired had $124 billion of client assets under administration, including institutional trust and global custody business totalling $98 billion, personal trust business with $8.5 billion in assets under administration, and investment management business of $10.8 billion including mutual fund assets of $3.8 billion.
 Royal Trust's worldwide financial intermediation business at Dec. 31, 1992 included $21.0 billion in total deposits, $9.0 billion in residential mortgages, $1.3 billion in personal and credit card loans and $2.9 billion in small Canadian commercial mortgages. These assets and liabilities would be acquired by Royal Bank along with approximately $650 million of larger domestic commercial loans and $300 million of international loans.
 The agreement in principle provides for a purchase price of $1,645 million. The purchase price is subject to adjustments based upon changes in size of the balances and assets under administration to be acquired that occur between Dec. 31, 1992 and the later of the date of closing or October 31, 1993.
 Under the terms of the agreement, Royal Trustco would retain a Canadian commercial loan portfolio of $2.0 billion, and loan portfolios of $0.9 billion and $1.4 billion in the United States and the United Kingdom, respectively.
 Following the closing, the transaction would be expected to increase Royal Bank's assets by approximately $14 billion or about 10 percent.
 Given the value and respect associated with Royal Trust, whose origins date back to 1892, Royal Bank intends to use the Royal Trust name to the fullest extent possible -- a name which customers in Canada and abroad identify with a broad range of professionally delivered quality products and services.
 The transaction contemplated by the agreement in principle is subject to satisfaction of certain conditions including the execution of definitive agreements. The transaction will also be subject to regulatory and court approvals and will require the approval of Royal Trustco's shareholders and debenture holders. Trilon Financial Corporation, which owns 47.5 percent of Royal Trustco's common shares, has indicated its support of the agreement in principle and has agreed to vote its shares in favor of the transaction.
 Allan R. Taylor, chairman and chief executive officer, Royal Bank, said, "This agreement creates tremendous opportunities for Royal Bank and Royal Trust, based on the quality of the employees of both organizations and a shared commitment to superior customer service.
 "It would advance by several years the implementation of Royal Bank's strategies and place us in a strong leadership position in a number of key businesses with above-average, long-term growth and profit potential," added Taylor. "Working together, we are confident we can preserve and build on the combined strengths to the benefit of both organizations."
 James W. Miller, president and chief executive officer, Royal Trustco, stressed that the two institutions would emerge as winners. "This agreement is in the best interest of our securities holders, clients, depositors and employees," he said. "It would join together two organizations that have been recognized in the marketplace as leaders in customer service and commitment to employees. This relationship would enhance these qualities and at the same time lend strength to the Canadian financial system. If the deal is consummated as proposed, it would be a win-win situation."
 Royal Bank expects to support the financing of the transaction partially through the issuance of non-cumulative preferred shares qualifying as Tier I capital. The bank does not currently intend to issue common equity. It would expect to have a Tier I capital ratio in excess of 6.0 percent at the time of closing, well above minimum regulatory requirements.
 Costs associated with the integration would be charged against Royal Bank's income in 1993. The bank expects a positive impact on earnings per share in the second full year after the transaction is completed.
 -0- 3/18/93
 /CONTACT: Denise Curran, public affairs of Royal Bank, in Toronto, 416-974-5506 or Sheila Robb, public affairs of Royal Trust, in Toronto, 416-981-6655/
 (RY.)


CO: Royal Bank of Canada; Royal Trustco Limited ST: Ontario IN: FIN SU: TNM

WB -- NY056 -- 0158 03/18/93 13:51 EST
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Publication:PR Newswire
Date:Mar 18, 1993
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