RE: RBC earns $1.936-billion in Q2 2013
RBC profit jumps 26 per cent
TIM KILADZE - BANKING REPORTER
THE GLOBE AND MAIL
Last updated Thursday, May. 30 2013, 6:41 AM EDT
A Royal Bank of Canada (RBC) sign is seen in downtown Toronto in this March 3, 2011 file photo. (MARK BLINCH/REUTERS)
Royal Bank of Canada proved that it still has earnings power, posting a second-quarter profit of $1.94-billion.
Though the country’s biggest bank couldn’t match its blockbuster first-quarter profit of $2.1-billion, its bottom line jumped 26 per cent relative to the same period in 2012.
The earnings amounted to $1.27 per share, just shy of analysts’ expectations of $1.29 per share. After stripping out one-time items, RBC made $1.97-billion, or $1.29 per share. Personal and commercial banking, a sore spot for some banks this quarter, was particularly encouraging, with a profit of $1.06-billion, up 12 per cent over 2012.
Canadian banking was boosted slightly by RBC’s acquisition of Ally Canada, but even after stripping out its $12-million profit contribution, the unit still made more than $1-billion, something the division’s managed to accomplish for the past four quarters.
Capital markets also saw its profit jump year-over-year to $386-million, however the division slumped relative to the strong numbers it posted in the past three quarters when it averaged earnings of $434-million.
The division saw encouraging growth in U.S. loan syndication and lending, but made less money in fixed-income trading. Toronto-Dominion Bank and Bank of Nova Scotia, by contrast, saw their wholesale banking earnings rise because of better fixed-income returns in the second quarter.
Much like its Big Six peers, RBC’s wealth management division performed well last quarter with a profit of $225-million, up 6 per cent from 2012. Rising markets boosted the value of assets under management, and that helped the bank earn more fees, which are calculated as a percentage of this value.