The Royal Bank of Canada exceeded earnings expectations in its last quarter despite the weakness of its capital markets division. It also announced a rise in dividends.
RBC said Thursday that its total net income rose six percent year-on-year to $ 4.25 billion in the second fiscal quarter, which ended April 30. On a tight basis, he earned $ 2.99 per share; the average estimate among analysts followed by Bloomberg was $ 2.69 profit per share.
The bank also raised its quarterly dividend to $ 1.28 per share on August 24, from its current payment of $ 1.20. Bloomberg’s dividend forecasting tool anticipated a $ 1.23 dividend.
Although markets have been shaken lately by concerns about central bank policies, inflation, Russia’s attack on Ukraine and China’s attempt to contain COVID-19, RBC’s profits in the last quarter they got a big increase in the release of funds that were previously reserved. for loans that could go wrong. The bank said it had released $ 342 million that had been set aside for provisions for loan losses. In the previous quarter, it recorded provisions of $ 105 million.
In a statement, RBC said the improvement in credit quality was “driven primarily by a reduction in uncertainty related to the COVID-19 pandemic, which was partially tempered by rising downside risks.” , including rising inflation and interest rates. “
Profits from the bank’s personal and commercial bread and butter division rose 17 percent year-on-year to $ 2.32 billion. It benefited from higher revenues as well as the release of $ 276 million from loan loss provisions.
RBC’s capital markets unit was the spot for second-quarter fiscal earnings, as net income fell 26 percent year-on-year to $ 795 million. The bank attributed this mainly to a drop in fixed income trading income and shares.