PNC Financial Services  Group confirmed this morning that it has agreed to buy struggling Raleigh-based RBC Bank for $3.45 billion in cash and stock.

The deal allows Pittsburgh-based PNC to expand quickly in the Southeast, and lets Royal Bank of Canada shed its underperforming U.S. subsidiary.

"This gives us a substantial growth opportunity by bringing our products and services to RBC Bank's markets," CEO James E. Rohr said during a conference call this morning.

PNC expects to close the sale in March 2012, which is when it plans to convert RBC branches to the PNC name. PNC also anticipates that it will cut about $230 million in costs "through operational and administrative efficiency improvements."

That undoubtedly will mean job cuts, especially at RBC's downtown Raleigh headquarters. RBC employs about 5,000 people, including 500 in Raleigh.

Rohr said in a phone interview that no decisions have been made on how many jobs will be eliminated, but added that the bank plans to minimize the number through attrition and by re-training employees whose positions are cut to handle other roles.

The Canadian parent corporation of Raleigh-based RBC Bank reported stronger quarterly profit this morning, and announced plans to boost its cash dividend to shareholders for the first time in nearly four years.

But the results from Royal Bank of Canada, that country's largest lender, were slightly weaker than analysts had expected, Bloomberg News reports. The stock fell in morning trading.

Royal Bank didn't include any updates on RBC Bank's future in the announcement about its second-quarter results this morning. Royal Bank has hired JPMorgan Chase to advise it on a possible sale of RBC Bank, according to recent published reports.

"Although I will not comment on speculation with respect to RBC Bank, we do remained focused on turning around these operations and we are making good progress," Royal Bank CEO Gordon Nixon said on a conference call. "We remain fully committed to the U.S. market and committed to generating strong returns."

The Canadian parent of RBC Bank is seeking buyers for the Raleigh-based lender, Bloomberg News reported, citing unnamed sources.

Royal Bank of Canada has hired investment bank JPMorgan Chase to provide advice on a potential sale, Bloomberg reported.

The recession and real-estate slump hurt financial results at RBC Bank, spurring speculation that Royal Bank might seek to sell the division and ditch its U.S. strategy.

Last month, Royal Bank reported record quarterly results, thanks partly to narrower losses at RBC Bank. RBC Bank CEO Jim Westlake said he's optimistic that the business will return to making money later this year.

Royal Bank of Canada shares fell today after the parent of Raleigh-based RBC Bank reported a weaker-than-expected quarterly profit.

Royal Bank announced that profit for the period that ended Oct. 31 fell about 9 percent to $1.12 billion. The company's international banking division, which includes RBC Bank, posted a loss of $155 million.

That division has been hammered during the recession, hurt by RBC Bank's exposure to the Southeast's slumping real-estate market. The division is expected to begin having quarterly profit in 2011, RBC Bank CEO Jim Westlake told analysts on a conference call.

But Royal Bank officials, who last year reorganized RBC Bank after the subsidiary began losing money, are eager to see further improvements.

"Our priority is to get that bank performing at a much, much higher level," Royal Bank CEO Gordon Nixon told analysts. "And then we'll make a decision in terms of how much more we want to invest in the U.S. banking sector generally."

The top executive of Royal Bank of Canada will weigh all options for its U.S. consumer bank, Raleigh-based RBC Bank, including a sale or expansion through additional acquisitions.

"Everything is on the table," CEO Gordon Nixon told Bloomberg News during an interview in New York. He said acquisitions or a merger with another bank are two ways to "maximize return."

But he added that concerns about bank balance sheets and U.S. banking regulations make it difficult to value potential acquisition targets. Royal Bank's last U.S. purchase was the $1.6 billion takeover of Alabama National Bank in Feb. 2008.

Royal Bank last year reorganized RBC Bank after the subsidiary began losing money during the recession, hurt by its exposure to real estate and deteriorating commercial loans.

"The first thing we're going to do is fix it," Nixon told Bloomberg. The biggest question is whether "that business is going to be as attractive as other opportunities for us to deploy capital."

RBC Bank isn't getting a whole lot of love from its Canadian parent these days.

Royal Bank of Canada's chief financial officer Janice Fukakusa told analysts in New York today that it needs to fix its Raleigh-based subsidiary before considering any further U.S. expansion.

“The U.S. banking platform has been something that we’re definitely not proud of in terms of shareholder returns,” Fukakusa said today at a New York conference hosted by Morgan Stanley, Bloomberg News reported. “Any talk about growth or expansion would be subsequent to getting it right.”

Royal Bank of Canada isn't in any hurry to find more acquisitions in the United States.

Chief financial officer Janice Fukakusa told an investor conference in Montreal today that the bank will likely wait until the recession is over to pursue new deals, Bloomberg News reported.

"Our preference, being fairly conservative, is to wait to see the market going up a bit and maybe pay a little more to have the certainty that we have bottomed out," Fukakusa said.

Royal Bank is the corporate parent of RBC Bank, which is based in Raleigh. The company has been cutting costs, including an undisclosed number of jobs, as it seeks to bolster its financial health.