TORONTO, March 26 (Reuters) - When Royal Bank of Canada

convenes its first investor day in seven years on

Thursday, shareholders will focus on growth, as trade tensions

worsen with its key U.S. market.

The United States accounts for 26% of RBC's revenue, and CEO

Dave McKay has often called it the bank's second home market.

"Where does Royal Bank grow?" asked Kevin Burkett, portfolio

manager at Victoria, BC-based Burkett Asset Management. "If the

tariff rhetoric coming from the U.S. is making that more

complicated, how will they deliver for investors in terms of

that growth?"

RBC, the largest lender in Canada and among the top 10 in

North America, has focused on its southern neighbor in recent

years, beefing up its U.S. capital market and wealth management

businesses. It also injected more than $3 billion to save its

U.S. subsidiary City National, a California-based lender that

caters to Hollywood clientele.

McKay has also sought to make RBC "simpler, faster and more

innovative" by adding scale, reducing complexity and investing

in talent, according to memos to employees seen by Reuters.

The messages come after McKay carried out RBC's landmark $10

billion purchase of HSBC's ( HSBC ) Canadian operations, shook

up senior leadership and divided the company's personal and

commercial banking segments in Canada.

The HSBC ( HSBC ) acquisition expanded RBC's size and market share,

giving it a more than C$80 billion advantage in market

capitalization over Canada's next biggest lender, TD Bank

.

"How do they level up?" Veritas Investment Research analyst

Shalabh Garg asked, noting that RBC has managed to avoid "major

landmines" that has plagued other Canadian banks including

slower earnings growth and regulatory woes. "On a global basis,

I think they can do lots more."

RBC has $2.1 trillion in assets, putting it into a category

of major North American lenders alongside JPMorgan Chase ( JPM )

, which has more than $4 trillion, Garg said.

RBC trades 12.02 times its forward earnings, beating TD's

10.82 times, Bank of Montreal's ( BNKD ) 11.48 times, Bank of

Nova Scotia's ( BNS ) 9.46 times and CIBC's 10.01

times, according to LSEG data.

Since RBC's last investor day in June 2018, the stock has

gained 66%. Shares of the other top five Canadian banks have had

mixed performances in that time, ranging from a loss of 8% to a

gain of 43%.

All five banks have invested in the United States.

Meanwhile, U.S. President Donald Trump has questioned the lack

of U.S. banks in Canada, gutted a consumer banking watchdog and

changed some immigration policies for Canadians.

Investors attending Thursday's gathering in Toronto expect

RBC to shift its strategy to new markets such as Europe. They

will also focus on executives' commentary on the bank's return

on equity and its plans to deploy capital, potentially in

higher-margin businesses that collect fees.

It makes more sense for RBC to buy smaller wealth management

assets than bigger retail assets, said Anthony Visano, a

managing director at Kingwest.

"They've suggested pretty strongly they have organic avenues

for capital deployment south of the border," Visano said.