RBC seeks to boost financial services for wealthy by paying $5.4 billion for City National

MarketsAssociated Press

Royal Bank of Canada plans to boost its services for wealthy clients by paying about $5.4 billion in cash and stock to buy U.S.-based City National Corp.

City National is a wealth management company based in Los Angeles that serves high net worth individuals and businesses. RBC is a bank based in Toronto, but has offices around the U.S. When the deal closes, which is expected to happen in the fourth quarter, City National will be combined with RBC's U.S. wealth management unit.

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RBC will pay $2.7 billion in cash and about 44 million of its own shares. RBC says the deal values City National's stock at about $93.80 per share, a 25.8 percent premium over Wednesday's closing price

City National shares jumped almost 14 percent to $88.25 in morning trading Thursday.