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Royal Bank Profit Trails Estimates as Rates Pressure Margins

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  • Bank plans to buy back 45 million shares, boost dividend
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Royal Bank of Canada is feeling the pinch of low interest rates pressuring profit margins as well as higher costs to pay bankers amid a strong stretch for capital markets.

The bank’s net interest margin -- the difference between what it earns on loans versus what it pays depositors -- narrowed to 1.43% in the fiscal fourth quarter from 1.51% in the third quarter, the Toronto-based lender said in a statement Wednesday. Analysts had projected a margin of 1.51%. Overall profit trailed estimates.