THE Royal Bank of Canada, the country's largest bank, plans to broaden its Asian operations following the C$1.66 billion (about HK$9.71 billion) acquisition of The Royal Trust Co earlier this year. Chairman and chief executive Allan Taylor said this would see the merging of Royal Trust's international operations and Royal Bank's private banking arm. As a result, Toronto-based Royal Trust, Canada's second-largest trust company, and Royal Bank will re-structure and merge operations in Hong Kong, Singapore and Taipei. Mr Taylor said Royal Bank would have one of the world's largest custodian businesses and be able to expand its trust activities in Hong Kong and the region by providing more services to clients locally. Another change will see Royal Trust Asia in Hong Kong become Royal Bank of Canada Investment Management (Asia). Mr Taylor, who visited Hong Kong last week as part of a six-day Asian tour, said Royal Bank would establish a Hong Kong investment management unit to manage all of its mutual funds and the Asian portion of clients' global portfolios. He said: ''These are important steps. Asia is recognised by our bank as the place of growth. Eleven of the 15 growing economies are in Asia, with average growth of six per cent expected over the next five years.'' Last March, Royal Bank became the first Canadian bank to open a branch in China. Mr Taylor said the Shanghai office and a representative office in Beijing provided Royal Bank with a good business base. ''It is an important part of the world and a growing place for Royal Bank,'' he said, adding that two-way trade between Canada and China had reached $4 billion last year. One of the biggest financial obstacles facing foreign banks in China is their inability to deal in the local currency - the yuan. However, Mr Taylor said Royal Bank was encouraged by recent statements made by a People's Bank of China (PBOC) representative that permission to deal in the yuan would be granted within a year. This would allow Royal Bank and other foreign banks to make loans in yuan. Many foreign or joint-venture firms do not borrow foreign currency because of China's currency uncertainties. Mr Taylor visited the office in Shanghai and met Shanghai Mayor Huang Ju. He then spent two days in Beijing meeting Vice-Premier Li Lanqing and officials from the PBOC, Bank of China and China International Trust and Investment Corp (CITIC). Earlier this month, Bank of Nova Scotia and Bank of Montreal both opened representative offices in Guangzhou. Mr Taylor said Royal Bank had no plans to open offices in Guangzhou or Shenzhen. He said much of Royal Bank's treasury group in Asia would be consolidated in Hong Kong. Royal Bank also provides trade finance and private banking in the territory.