Although ratings agency Moody's Investor Service has downgraded the credit ratings of Canada's biggest bank, the Royal Bank of Canada, that shouldn’t stop would-be candidates from applying for a job at RBC, a Canadian recruiter says.
“I would say that while Moody's is anticipating more market volatility and the risk aversion sentiment this creates in the public, this downgrade will not impact RBC negatively,” says Janice Detta Colli, a managing director of Boyden Canada who leads Boyden’s Toronto office.
Moody's cut RBC's long-term deposit rating by two notches to Aa3, as Bloomberg and others reported on June 21st. RBC wasn't alone in receiving a downgrade. Moody’s cut ratings of 14 other banks with global operations.
Still, “RBC has world class risk management strategies in place and is well run by, for the most part, long tenured employees who have played key roles in the bank's success to date. RBC will continue to stick to their values and will lead the market in performance,” Detta Colli told eFinancialCareers.
A downgrade usually means that it becomes more costly for banks to raise money by selling debt. Investors demand higher interest for riskier debt, which is what the downgrades represent.
Royal Bank has said the downgrade will not affect its clients and will have a minimal impact on its business, and Detta Colli says it still ranks as the top performing Canadian bank.
“Thus, it remains an attractive employer despite Moody's caution,” says the recruiter.
"RBC remains one of the strongest and highest rated banks in the world. That category crosses a number of classifications in terms of credit ratings, in terms of capital base and in terms of balance sheet," bank officials said in a statement.
"While Moody's has changed [its] overall view of the capital markets industry, RBC Capital Markets has been consistently profitable, thanks to a strategic and measured approach to growth and prudent risk management," RBC said.
Moody's said it was especially concerned about banks with significant financial markets businesses because those markets have become so volatile.