On Wednesday, the Royal Bank of Canada (RBC) posted a higher profit for the quarter as it gains in its personal and commercial banking industry and wealth management business counterbalanced its capital markets arm weakness.
Canada’s largest bank, RBC posted an increased net income of 2.02 billion US dollars or 1.57-Canadian-dollar per share during the fourth quarter that ended October 31. Last year, the company’s net income was at 2.1 billion Canadian dollars or 1.39 Canadian-dollar per share.
Earnings were posted at C$1.59 per share, excluding the amortization of its intangible assets. Analysts, on the other hand, expected C$1.58 per share adjusted profit.
Tom Lewandowski, an analyst from Edward Jones said RBC was basically in line, rating the company’s stock a “hold”. Thus, results relieved some investors a day after the Bank of Montreal posted its earnings that are lower than expectations due to its capital markets arm weakness.
Company shares dropped 2 cents at C$81.40 in Toronto’s afternoon trading. On November 20, the company said it is closing its global client wealth management venture in the Caribbean.
David McKay, Chief Executive Officer (CEO) said that the remaining operations in the Caribbean were developing, and the management believed that unit will recover next year.
Personal and commercial banking divisions’ net income rose 8% to C$1.15 billion in the quarter, while net income in its wealth management rose 41% to C$285 million. However, net income in its capital market unit dropped 14% to C$402 million due to lower revenue as well as the costs from some of the exiting proprietary trading strategies.
Janice Fukakusa, Chief Financial Officer, said RBC the company had aimed at completing the majority of the exits by October 31. Fukakusa also said the company is in the process of reorganizing capitals to other ventures.