Royal Bank Joins CIBC in Raising Dividends as Profits Increase

Royal Bank of Canada and Canadian Imperial Bank of Commerce raised their dividends after reporting third-quarter profits that beat analysts’ estimates.

Royal Bank, the country’s biggest lender, said profit for the period ended July 31 rose 73 percent to C$2.24 billion ($2.26 billion), or C$1.47 a share, from C$1.29 billion, or 83 cents, a year earlier. CIBC said profit rose 42 percent to C$841 million, or C$2 a share.

Royal Bank and Canadian Imperial join Bank of Montreal (BMO) and Bank of Nova Scotia (BNS) in raising dividends this week as gains in consumer lending helped the country’s biggest banks report earnings that beat estimates. Royal Bank and Scotiabank posted record profits.

Royal Bank said it earned C$1.31 a share excluding items, beating the C$1.18-a-share average estimate of 15 analysts surveyed by Bloomberg News.

CIBC, Canada’s fifth-biggest bank, said it had adjusted earnings of C$2.06 a share, beating the C$1.96 a share average estimate of 15 analysts.

Toronto-Dominion Bank (TD), the second-largest lender, and Montreal-based National Bank of Canada (NA), the No. 6 lender, also report today.

Canadian banking profit at Toronto-based Royal Bank rose to a record C$1.13 billion, up 27 percent from a year ago, on growth of deposits, mortgages and loans. International banking, which includes Caribbean banking and RBC Investor Services, had a C$31 million loss compared with profit of C$18 million a year earlier.

Profit at the RBC Capital Markets investment-banking business rose 88 percent to C$486 million, from C$259 million a year earlier.

Wealth management profit fell 19 percent to C$156 million, from C$192 million, while insurance rose 27 percent to C$179 million.

Royal Bank unexpectedly raised its dividend 5.3 percent to 60 cents a share, its first increase since March. CIBC increased its payout for the first time in a year, to 94 cents.

(Royal Bank will hold a conference call to discuss earnings at 7:30 a.m. Toronto time at +1-416-340-2217 or +1-866-696-5910 passcode 1853457 or at www.rbc.com/investorrelations/ir_events_presentations.html).

(CIBC will hold a conference call to discuss results at +1-416-340-2217 or +1-866-696-5910 passcode 3201624 starting at 8:30 a.m. Toronto time.)

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; David Scanlan at dscanlan@bloomberg.net

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