RBC profit slips as larger loan provisions weigh

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The Royal Bank of Canada reported a profit of $3.88 billion in its fourth quarter, beating analyst expectations and boosting its dividend.

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The bank’s adjusted earnings were $2.78 per share in the three months ending Oct. 31, beating average analyst expectations of $2.69 per share. RBC said these quarterly earnings were relatively flat compared to the same quarter a year ago. Net income for the full fiscal year slipped two per cent from last year to $15.8 billion as volatile markets hit the bank’s capital markets segment.

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The bank’s loan loss provisions in the fourth quarter were $381 million compared to a release of $227 million this quarter last year.

Personal and commercial banking profits grew by five per cent year-over-year to $2.14 billion bolstered by higher interest rates and a 10 per cent boost in mortgage and business loan growth.

Higher net interest income also boosted RBC’s wealth management by 47 per cent compared to a year ago to $822 million.

However, income in the bank’s capital markets segment slipped 33 per cent to $617 million, which RBC largely attributed to the timing of its compensation plans.

On Tuesday, the lender agreed to buy British bank HSBC’s Canadian business for $13.5 billion, looking to expand its footprint in the domestic retail market.

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