PNC Financial has announced that it will buy Raleigh-based RBC Bank in a move that will allow the Pittsburgh-based bank to expand into the South. The deal is worth nearly $3.5 billion. Jim Westlake is the CEO of RBC Bank in Raleigh. He says he doesn't know yet what the local impact will be.
Jim Westlake: "We haven't got to that level of discussion yet but certainly we are a significant presence here both in terms of our head office as well as our branch network. They've also inherited the RBC Center where the Hurricanes and the Wolfpack play. So they will certainly be a presence here in Raleigh and I think that we're going to work with them over the next few months to see what that will translate to in terms of job and presence."
PNC has already announced targeted cuts of $230 million. That means there will likely be jobs cut. PNC out-bid Winston-Salem based BB&T for the purchase. Michael Walden, an economist at NC State University, says the PNC deal the ideal scenario for RBC.
Michael Walden: "The footprint of RBC and BB&T overlaps much more in terms of the geographical area served by those two banks than does the footprint of PNC and RBC. So I think in terms of preserving jobs, the merger of RBC with PNC is much better, much better for the employees of RBC."
The 500 RBC employees at the bank's Raleigh headquarters could feel the impact first. But Rocky Mount is home to a thousand RBC employees and has a shakier economy. Rocky Mount Mayor David Combs says the unemployment rate is around 12.5% in his metro area.
David Combs: "We've suffered a lot over the last 10 or 15 years as textiles left the area. We recovered from that fairly well even though we're still like everybody else right now. Certainly losing these types of jobs would be critical to a city like ours right now. So we're going to do, and work as hard as we can to sell them on Rocky Mount as a great place to do business."
The sale is expected to be completed in March of 2012 pending regulatory approval.