Royal Bank Of Canada Q3 Profit Rises, Boosts Dividend

(RTTNews) - Canadian financial services provider Royal Bank of Canada (RY, RY.TO) reported Wednesday a profit for the third quarter that grew four percent from last year, reflecting record earnings in personal & commercial banking, strong growth in investor & treasury services, and stable earnings in wealth management. Results also reflect the positive impact of foreign exchange translation.

These factors were partially offset by lower earnings in Capital Markets compared to record results last year, and lower earnings in Insurance which included the impact of a change in Canadian tax legislation. Results also reflect the positive impact of foreign exchange translation.

"We delivered a solid quarter, with earnings of over $2.4 billion, reflecting underlying strength across our businesses and strong execution in a challenging environment. I'm pleased to announce today a 3% increase to our quarterly dividend," President and CEO Dave McKay said.

The Toronto, Canada-based company reported net income attributable to common shareholders of C$2.40 billion or C$1.66 per share for the third quarter, higher than C$2.30 billion or C$1.59 per share in the prior-year quarter.

Excluding items, adjusted net income for the latest quarter was C$2.48 billion or C$1.66 per share, compared to C$2.42 billion or C$1.62 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of C$1.67 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter declined 1.8 percent to C$8.83 billion from C$8.99 billion in the same quarter last year, but topped eight Wall Street analysts' consensus estimate of C$8.71 billion.

Net interest income grew 3.6 percent to C$3.78 billion, while non-interest income declined 5.4 percent to C$5.05 billion from last year.

Segment-wise, personal & commercial banking net income increased 13 percent from the year-ago quarter to a record C$1.28 billion, with Canadian Banking net income rising 5 percent to a record C$1.24 billion, and Caribbean & U.S. banking net income of C$42 million, compared to a net loss of C$47 million last year.

Wealth management net income remained flat with last year at C$285 million.

Insurance net income declined 19 percent to C$173 million from last year, and capital markets decreased 15 percent to C$545 million from the year-ago quarter. Meanwhile, investor & treasury services net income surged 52 percent to C$167 million from a year ago. Corporate support net income was C$24 million, compared to last year's loss of C$10 million.

Total provision for credit losses for the third quarter declined to C$270 million from C$283 million in the prior-year quarter.

Non-interest expense for the quarter was C$4.64 billion, higher than C$4.60 billion in the prior-year quarter.

The bank said it continued to strengthen its capital position in advance of closing the announced acquisition of City National, which is expected in the fourth calendar quarter of 2015. Its Basel III common equity Tier 1 ratio was 10.1 percent as at the end of the third quarter.

Separately, Royal Bank of Canada declared a 3 percent higher quarterly common share dividend of C$0.79 per share, payable on and after November 24 to common shareholders of record at the close of business on October 26, 2015.

RY closed Tuesday's regular trading session at $54.16, down $0.89 on a volume of 3.11 million shares. In the past 52-week period, the stock has been trading in a range of $51.27 to $76.08.

On the Toronto Stock Exchange, RY.TO closed at C$72.37, down C$0.56 on a volume of 3.82 million shares. In the 52-week period, the stock has been trading in a range of C$68.05 to C$83.87.