Royal Bank of Canada
on Thursday reported a rise in second-quarter profit as the lender’s personal and commercial banking unit benefited from higher interest income.
Though customer payments on mortgages, credit cards and other loans have shrunk, large banks still continue to benefit from elevated benchmark lending rates.
RBC’s personal and commercial banking unit’s net income rose 7 per cent to $2.05-billion in the reported quarter, primarily driven by higher net interest income, or the difference between what a bank earns on loans and pays on deposits.
The gains were partially offset by larger loan loss provisions, or the capital lenders set aside to cover customers who are unable to pay back debt on mortgages and credit cards.
A cost-of-living crisis and higher-for-longer interest rates have clouded the outlook for banks in 2024.
Provisions for credit losses at RBC increased $320-million in the second quarter from a year earlier.
The results round out a mixed earnings season for Canada’s big six lenders, which have been looking for opportunities to diversify south of the border and are seeking alternative paths for growth as competition intensifies in a saturated market at home.
The country’s largest bank’s profit climbed to $3.95-billion, or $2.74 per share, for the three months ended April 30. That compares with $3.68-billion, or $2.60 per share, a year earlier.