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UPDATE 1-RBC says bad loans rose 19 percent in second quarter

Published 2016-05-26, 06:33 a/m
© Reuters. UPDATE 1-RBC says bad loans rose 19 percent in second quarter
RY
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(Adds comment from chief executive)
TORONTO, May 26 (Reuters) - Royal Bank of Canada ( RBC )
RY.TO said on Thursday bad loans increased by C$583 million
($450 million), or 19 percent, in the second quarter from the
quarter before, largely due to a rise in credit to oil firms
that had turned sour.
Canada's biggest banks are seeing an increase in energy
clients struggling to pay back loans following a sharp decline
in the price of oil. Bank of Montreal said on Wednesday it had
set aside more funds to cover losses.
Despite the warning, RBC reported a 7 percent increase in
second-quarter profit from the same quarter a year earlier,
which it said reflected strength across its businesses.
Canada's biggest bank by market value said net income
excluding one-off items for the second quarter to April 30 was
C$2.6 billion, or C$1.66 per share, compared with C$2.4 billion,
or C$1.61 per share, a year earlier.
Analysts on average had expected earnings of C$1.64 per
share, according to Thomson Reuters I/B/E/S.
"RBC continues to be well positioned going forward given the
strength of our diversified business model, our prudent risk
management and our ability to effectively manage costs," said
Chief Executive Dave McKay
($1 = 1.2962 Canadian dollars)

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