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Bloomberg
Royal Bank of Canada beat analysts’ profit estimates as the City National purchase in the U.S. bolstered wealth management and capital markets earnings surged. Canada’s biggest bank raised its dividend 2.5 percent to 83 cents a share.
Profit for the quarter ended July 31 climbed 7.5 percent to $2.06 billion, or C$1.72 a share after excluding gains from selling an insurance unit, from C$2.48 billion, or C$1.66 a year earlier, the Toronto-based bank said Wednesday in a statement. Adjusted profit, which excludes some items, was C$1.76 a share, beating the C$1.71 average estimate of 14 analysts surveyed by Bloomberg.
Royal Bank joins Bank of Montreal in topping analysts’ estimates for the fiscal third quarter as the acquisition of Los Angeles-based City National contributed to revenue of C$10.3 billion and bolstered earnings at the money-management unit. Fixed-income trading revenue also surged. Royal Bank posted a C$235 million net gain from selling a Canadian home and auto insurance business to Aviva Plc in July. Net income rose 17 percent to a record C$2.9 billion, or C$1.88 a share when including the gain.
The bank set aside C$318 million for bad loans, up 18 percent from C$270 million a year earlier, though lower than the C$460 million recorded in the second quarter.
Royal Bank posted profit of C$1.28 billion from Canadian banking, its biggest unit, up 3.6 percent from a year earlier, while wealth-management profit jumped 36 percent to C$388 million. RBC Capital Markets earnings rose 17 percent to C$635 million, lifted by higher fixed-income trading revenue and lower taxes.
Bank of Montreal beat analysts’ estimates on Tuesday as profit rose 4.4 percent in the quarter, lifted by higher earnings in U.S. banking and a surge in trading revenue. Toronto-Dominion Bank, Canada’s second-largest lender, and fifth-ranked Canadian Imperial Bank of Commerce are scheduled to report Thursday, followed by Bank of Nova Scotia on Aug. 30 and National Bank of Canada on August 31.