ROYAL Bank of Canada (RBC) on Wednesday (Aug 28) surpassed analysts’ estimates for quarterly profit as it set aside a smaller than expected sum to protect itself against losses on bad loans.
The results were also boosted by a 17 per cent rise in earnings at its personal and commercial banking segment to C$2.49 billion (S$2.4 billion), which benefited from its C$13.5 billion acquisition of HSBC’s domestic operations and a rise in net interest income.
Canada’s biggest bank by market capitalisation, RBC has taken a number of strategic actions, including rejigging its upper ranks and changing its reporting segments, while absorbing HSBC’s 780,000 clients and C$71 billion loan book.
“RBC is better positioned than ever to accelerate our next phase of growth,” chief executive officer Dave McKay said in a statement.
A resurgence in dealmaking activity as expectations of a soft landing gave corporate executives the confidence to pursue acquisitions and sell stocks and bonds to raise capital helped RBC’s capital market business record a 23 per cent jump in net income to C$1.17 billion.
The results are in contrast with those of others of Canada’s big five banks that have reported so far that were dragged down by credit pressures or provisions for penalties related to US investigations.
RBC’s net interest income (NII) – the difference between what a bank earns on loans and pays out on deposits – rose 16.5 per cent.
Provisions for credit losses came in at C$659 million, compared with analysts’ estimate of C$903 million, according to LSEG data.
The bank’s adjusted net income rose 16.2 per cent to C$4.73 billion. On a per share basis, the bank earned C$3.26 per share compared with the average analyst estimate of C$2.95 per share. REUTERS
