💙 🔷 Not impressed by Big Tech in Q3? Explore these Blue Chip Bargains insteadUnlock them all

UPDATE 3-Canada's Royal Bank hits C$3 billion quarterly profit

Published 2017-02-24, 10:16 a/m
© Reuters.  UPDATE 3-Canada's Royal Bank hits C$3 billion quarterly profit
CM
-
RY
-

* Q1 EPS C$1.97 vs forecast C$1.77

* Dividend up 5 percent to C$0.87

* CEO says focus in United States on organic growth (Adds CEO comment from conference call)

TORONTO, Feb 24 (Reuters) - Royal Bank of Canada RY.TO on Friday reported quarterly earnings of more than C$3 billion ($2.3 billion) for the first time, beating market forecasts, and benefiting from a strong performance at all its businesses.

Canada's biggest bank said on Friday net income for the first quarter to Jan. 31 rose by 24 percent to C$3.03 billion.

Earnings per share increased to C$1.97 from C$1.58 a year earlier, exceeding analysts' forecasts of C$1.77, according to Thomson Reuters I/B/E/S.

Shares in RBC , which has a substantial business in the United States, have risen by nearly 20 percent since Donald Trump's election as U.S. president in November.

The stock has benefited from expectations the new administration will introduce softer banking regulations and a lower corporate tax rate and that pro-growth policies will lead to higher interest rates.

Chief Executive Dave McKay said that the bank's U.S. strategy is focused on organic growth following its $5 billion acquisition of Los Angeles-based City National in 2015.

"Our large focus in the United States right now is executing organic growth within City National and organic growth within the capital markets franchise. We continue to see opportunities to deploy capital organically," he said on a conference call.

McKay added that rising valuations for U.S. banks following Trump's election make it harder to do deals in the current environment.

"You look at the prices of U.S. banks and the ability to generate synergies and return on capital remains challenging at best so we're obviously very conscious of shareholder return as we look at tuck-in acquisitions for City National," he said.

Net income at the bank's personal and commercial business rose by 23 percent to C$1.59 billion. The capital markets division reported a 16 percent increase to C$662 million.

RBC also cheered investors with a 5 percent increase in its quarterly dividend, to 87 Canadian cents per share.

Smaller rival Canadian Imperial Bank of Commerce CM.TO reported higher-than-expected earnings on Thursday, but uncertainty over a planned U.S. acquisition overshadowed its performance. current share prices, RBC is North America's fifth most-valued bank, with a market capitalization of C$147 billion.

($1 = 1.3099 Canadian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.