RBC earnings beat expectations | Financial position

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TORONTO – Royal Bank of Canada says it is rewarding its shareholders as its second-quarter earnings rose from last year and it successfully closed its acquisition of HSBC Canada.

The bank said Thursday it will now pay a quarterly dividend of $1.42 per share, an increase of four cents. It also said it plans to buy back up to 30 million of its shares.

The moves came as RBC said it earned $3.95 billion, or $2.74 per diluted share, for the quarter ended April 30, up from $3.68 billion, or $2.60 per diluted share, a year earlier, helped by partly due to record inflows into the capital markets.

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“This quarter, we saw strong growth in diversified revenue streams,” CEO Dave McKay said on an earnings call.

He said the bank’s capital generation means it has growth options ahead, including potential acquisitions, even as the bank returns more money to shareholders.

“This enormous capital that we are generating gives us important strategic flexibility inorganically.”

The bank also now has a wide range of growth options within the bank, including making the most of its $13.5 billion acquisition of HSBC Canada.

The roughly 4,500 employees RBC took on with the acquisition are now free of the uncertainty surrounding the deal and the barriers it posed to attracting clients, he said.

“They’ve been on defense for 18 months, and now we’re on offense and you can see the excitement in their eyes to be back,” McKay said.

Revenue totaled $14.15 billion, up from $12.45 billion in the same quarter last year.

The bank’s provision for credit losses totaled $920 million for the quarter, up from $600 million a year ago.

On an adjusted basis, RBC said it earned $2.92 per diluted share, down from an adjusted profit of $2.68 per diluted share a year earlier.

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Analysts on average expected a profit of $2.75 per share, according to LSEG Data & Analytics.

The results place RBC as the best-performing bank of the quarter, said Scotiabank analyst Meny Grauman.

“Based on reporting from the big six Canadian banks, we would place RY at the top of its class this quarter,” he said in a note.

RBC said its personal and commercial banking business earned $2.05 billion, up from $1.92 billion in the same quarter last year, while its wealth management business earned $769 million, up from $719 million ago. one year.

The bank’s insurance business earned $177 million in the second quarter, up from $170 million in the same quarter last year.

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RBC’s capital markets business earned $1.26 billion, up from $962 million a year ago, helped by increased M&A activity, loan syndications, as well as equity and debt generation.

The bank’s corporate support segment reported a loss of $309 million in its latest quarter, compared with a loss of $86 million a year ago.

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