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Fitch Ratings affirmed the default ratings of Canada’s largest banks Monday, but changed its outlook on Royal Bank of Canada’s to negative from stable.

The ratings agency said the change was made because Royal Bank’s “future earnings volatility may be higher than Canadian bank peer averages as well as in comparison to similarly rated global financial institutions.”

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Part of the reason is Royal Bank’s purchase of Los Angeles-based private and commercial lender City National Bank, Fitch said in a report issued Monday.

The ratings agency is generally positive about the $5-billion acquisition, but said it left Royal Bank with tangible capital ratios lower than similarly rated global peers. And though City National should provide Royal Bank with good growth opportunities in markets in the United States, it could be modestly dilutive to the Canadian bank overall return on equity, Fitch said.