Royal Bank Profit Rises to Record on Consumer Lending
Royal Bank of Canada Profit Rises to Record
Norm Betts/Bloomberg
The Royal Bank of Canada logo is displayed on a sign at their headquarters building.
The Royal Bank of Canada logo is displayed on a sign at their headquarters building. Photographer: Norm Betts/Bloomberg
Royal Bank of Canada (RY) reported record first-quarter profit, topping analysts’ estimates for the first time in six quarters, on higher consumer lending and investment- banking fees.
Net income for the period ended Jan. 31 rose 23 percent to C$1.84 billion ($1.89 billion), or C$1.24 a share, from C$1.5 billion, or C$1, a year earlier, the Toronto-based bank said today in a statement. Revenue rose to C$7.4 billion from C$7.33 billion a year earlier.
Royal Bank is the sixth Canadian bank to beat estimates this quarter, joining lenders including Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and National Bank of Canada, after the country’s economy grew more than economists forecast in the fourth quarter. Capital markets revenue also lifted earnings on higher stock and bond sales.
“The markets have been active, money’s flowing into financial assets,” Tony Demarin, chief investment officer of BCV Asset Management, said in an interview before earnings. “RBC remains the leader in that area.”
Excluding one-time items, Canada’s biggest bank said it earned C$1.26 a share, beating the C$1.01 a share average estimate of 14 analysts surveyed by Bloomberg News.
Royal Bank rose 38 cents to C$56.94 yesterday on the Toronto Stock Exchange. The stock has risen 9 percent this year, compared with a 7 percent gain for the 10-company Standard & Poor’s/TSX Banks Index.
Dividend Unchanged
The bank kept its dividend unchanged at 50 cents, the 14th consecutive quarter without an increase. Royal Bank set aside C$334 million for bad loans, down from C$493 million a year earlier.
Canadian consumer banking earnings rose 14 percent to a record C$882 million on volume growth and lower loan-loss provisions, the bank said.
International banking, which includes Raleigh, North Carolina-based RBC Bank, had earnings of C$24 million for its first profit in 11 quarters. Royal Bank has spent almost two years reorganizing RBC Bank as Canadian rivals Bank of Montreal and Toronto-Dominion Bank expand by buying troubled U.S. lenders.
Earnings from the RBC Capital Markets investment-banking unit rose 7.4 percent to C$613 million from a year earlier.
Trading revenue was C$1 billion, compared with a C$1.04 billion a year earlier.
Wealth management, which includes mutual funds sales, rose 1 percent to C$221 million from a year earlier. Insurance rose 23 percent to C$145 million.
Bank of Nova Scotia, the third-biggest bank, reports results on March 8.
(Royal Bank will hold a conference call to discuss first- quarter results at 7:30 a.m. Toronto time. Dial +1-866-696-5910 passcode 1853457 or +1-416-340-2217 for the call. The bank will also hold its annual investor meeting at 9 a.m. The analysts call and annual meeting will be webcast at www.rbc.com/investorrelations/ir_events_presentations.html)
To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net
To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net David Scheer at dscheer@bloomberg.net
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