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(Bloomberg) — Royal Bank of Canada topped estimates on better-than-expected results across most of its business lines and lower-than-forecast provisions for loan losses.
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Canada’s largest bank earned C$3.90 a share on an adjusted basis in the fiscal second quarter, according to a statement Thursday, more than analysts’ C$3.77 average estimate in a Bloomberg survey.
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The bank, which benefits from a diversified collection of businesses with significant scale, reported overall net income of C$5.51 billion ($3.97 billion) in the three months through April, more than the C$5.31 billion analysts forecast. That’s up 26% from the same time last year.
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The results are “underpinned by solid growth across our diversified businesses and balance sheet strength,” Chief Executive Officer Dave McKay said in the statement.
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Net interest income, the difference between what the firm charges on loans and pays out on deposits, was C$8.51 billion, more than the C$8.47 billion analysts forecast. Royal Bank also saw better-than-expected results on fee revenue, with noninterest income totaling C$8.95 billion, topping the C$8.63 billion average estimate.
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The firm’s wealth-management and capital-markets franchises have both benefited from elevated market activity tied to global uncertainty as well as their significant relative exposure to the US, where dealmaking has picked up.
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Net income at Royal Bank’s capital-markets unit totaled C$1.48 billion, better than the C$1.4 billion average estimate. Wealth management came in at C$1.19 billion, falling short of the C$1.21 billion estimate while up 28% from a year earlier.
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At the firm’s Canadian personal-banking unit, its biggest business, net income was C$1.87 billion, more than the C$1.83 billion analysts forecast.
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On credit, Royal Bank set aside C$912 million in provisions for loan losses in the quarter, less than the C$1.05 billion average forecast.
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It also announced an increase to its quarterly dividend Thursday, boosting it 7% to C$1.76 a share, and said it plans to repurchase as many as 45 million common shares, representing about 3% of its common stock.
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