Monday , August 15 2022

RBC raises a dividend, challenging market conditions & # 39; hitting C1 profits


TORONTO – Royal Bank of Canada (RY.TO) has raised its dividend as it identifies a quarterly net income of $ 3.17 billion, up from $ 3.01 billion a year, consistent with street expectations as market volatility during the period pushing its earnings.

The lender based on Toronto visited his quarterly payment to ordinary shareholders by four cents to $ 1.02 per share.

The bank dividend increased on Friday as the firm earnings lender of its banking and personal and commercial insurance divisions for the quarter ended January 31.

However, RBC also reported level results of a wealth management arm and lower results in capital markets and investor and treasury services due to challenging market conditions.

"Our incredible strategy and focus on providing value to clients and shareholders continues to support our ability to achieve sound results consistently, even against a challenging background in the market, "said Dave McKay, chief executive of RBC, in a statement.

"We continue to focus on managing our risks and balancing investments for long-term growth as we transform the client's journey."

Canada's biggest lender indicated the net income market value for the three month period ending on January 31 which amounted to $ 2.15 per weak share, compared to $ 2.01 a year ago.

After adjustments, RBC earned $ 2.19 per weak share, matching $ 2.19 per share expected by analysts, according to Thomson Reuters Eikon.

Increasing RBC loan losses highlight the potential risk for the growth of Canadian bank earnings

Robert Wessel, a managing partner at Hamilton Capital, offers an insight and analysis of the quarterly quarterly earnings of the Royal Bank and any clues about what to expect for the rest of Canada's largest banks.

The bank's personal and commercial banking division earned a net income of $ 1.57 billion, an increase of 3.3 percent of the same period a year earlier, mainly due to volume growth and the spread of a higher deposit. RBC insurance reported net income of $ 166 million, up to 31 percent of the previous year's period.

However, his other sub-divisions came under pressure from the exciting market during the quarter.

The bank's wealth management arm achieved earnings of $ 597 million, one-year flat a year ago, due to factors including higher costs associated with business growth and "lower transaction volumes such as equity markets affected uncertainty."

The RBC treasury investors and services branch saw a decrease in net income from 26 per cent to $ 161 million, mainly due to lower funding and liquidity revenue, higher costs to support business growth and lower revenues from the business of asset services due to challenging conditions the market and lower client activity.

The total earnings for the RBC capital markets department was $ 653 million, down 13 per cent a year earlier, mainly due to higher provisions for lower credit and lower revenue losses in corporate banking and investment activity and issuance activity.

Although RBC earnings per share for the quarter were in line with expectations, the results of the bank were "lower quality," said Scott Chan, an analyst with Chanaccord Genuity Capital Markets, in a note to clients.

"In terms of share price appreciation (RBC) going to the quarter, we see these results quite well and expect the stock to be pretty underperforming," said Chan.

The bank's provisions for credit losses, or money set aside for bad loans, increased in the latest quarter increased by 54 per cent to $ 514 million, compared to $ 334 million a year earlier, " mainly due to higher provision on impairment loans in capital markets taken on one account in the utility sector, "said RBC.

The common bank equity tier (CET1) ratio, a key measure of financial health, was 11.4 per cent, down from 11.5 per cent during the previous quarter, but up from 11 per cent a year ago.

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