TORONTO (Reuters) - Royal Bank of Canada (>> Royal Bank of Canada) is in no rush to do more acquisitions now that its $5.4 billion deal for City National Corp (>> City National Corp) gives it a platform to expand in U.S. wealth management and commercial banking, RBC's chief executive said.

Canada's No. 1 bank said the deal, announced on Thursday, was driven in large part by its desire for City National's stable of high-net worth clients and by the high quality of the Los Angeles-based bank.

"I wouldn't call it a one-and-done, but we don't need to make other acquisitions to achieve our goals. This is such a strong platform," RBC Chief Executive Dave McKay told Reuters. "It's the piece that was missing."

"If an acquisition presented itself, a small one that accelerated a new market entry, whether it be Houston or Washington, we would consider it if it presented great short-term shareholder value accretion ... but it's not necessary."

McKay, who took over leadership of RBC in August, said the lender would also look at smaller acquisitions in the alternative asset management space, such as real estate, that would help it better serve big institutional clients.

RBC offered a roughly 26 percent premium to secure the deal for the U.S. private and commercial bank. But McKay said the price was merited by the quality of the lender and potential cost savings.

"I'm paying a billion-dollar premium. And I feel strongly I can drive $200 million in synergies," he said, adding the deal offers upside from a strengthening U.S. economy and projected U.S. interest rate increases.

McKay said the transaction was also informed by RBC's acquisition more than a decade ago of North Carolina-based mass-market lender Centura, which turned into a cash sinkhole. RBC eventually sold off Centura.

The chief executive said that purchase taught him the importance of paying more for quality and focusing on wealthier customers and markets.

"Start with the right franchise, and grow on top of it, and don't try to change it and fix it," he said, adding that City National offers a "different customer, different market, different quality franchise. It's night and day."

McKay said RBC's balance sheet is strong enough that the deal would not change the bank's existing dividend and share buyback strategy.

(Editing by Peter Galloway)

By Jeffrey Hodgson

Stocks treated in this article : City National Corp, Royal Bank of Canada