BDC Fact #6
Between 2003 and 2007, The Business Development Bank of Canada grew their loan book from $6.3 billion to $8.8 billion, about 39%. During the same four fiscal years, The Royal Bank of Canada grew its small business and wholesale loan book 48%, from $52.4 billion to $77.4 billion.
Considering that RBC spent $82.8 million on donations and sponsorships alone last year, and another ~$500 million on marketing and advertising, does it not strike you as remarkable that in a thriving economy, BDC grew its portfolio practically in line with Canada’s largest bank?
BDC’s “other expense” line was $60.5 million for the last fiscal year. Marketing and advertising would be a subset of that number. RBC likely outspent BDC well in excess of 10x on marketing and brand building, each and every year since 2003.
Despite a very talented team, increased headcount and a great brand, RBC was unable to grow its loan book by more than 9% versus the BDC during that period. Why would that be?