Royal Bank of Canada (RY, RY.TO) Wednesday reported higher profit for the first quarter, aided by improved results from most segments and lower provision for credit losses.
For the first quarter ended January 31, the company's net income increased to C$1.497 billion from C$1.110 billion in the first quarter of the previous year, reflecting the general improvement in market and economic conditions. Net income available to common shareholders improved to C$1.433 billion from C$1.069 billion. Earnings per share improved to C$1.00 from C$0.78.
The latest quarter included amortization of other intangibles and goodwill impairment of C$40 million, compared to C$51 million last year.
Cash net income for the quarter was C$1.537 billion, up from C$1.161 billion last year. Earnings per share on a cash basis improved to C$1.03 from C$0.81 last year.
In the previous quarter, the company reported net income available to common shareholders of C$1.173 billion or C$0.82 per share.
Total revenue for the first quarter increased to C$7.334 billion from last year's C$6.761 billion. In the previous quarter, revenue totaled C$7.459 billion.
In the latest quarter, net interest income amounted to C$2.747 billion and non-interest income was C$4.587 billion. In the year-ago period, the company generated C$2.832 billion in net interest income and C$4.231 billion in non-interest income. The year-over-year improvement stemmed mainly from trading revenues of C$750 million in the latest quarter, compared to trading losses of C$47 million last year.
In Canadian Banking, net income rose to C$777 million from C$696 million and total revenue improved to C$2.638 billion from C$2.465 billion. The company said the segment's results reflected continued strong volume growth across most businesses and ongoing focus on cost management.
Wealth Management segment's net income for the quarter rose to C$219 million from C$128 million reported last year, helped by higher average fee-based client assets and transaction volumes, cumulative accounting adjustments of C$34 million after-tax, and a favorable income tax adjustment of C$30 million. Total revenue rose to C$1.064 billion from C$997 million.
First-quarter net income for the Insurance segment improved to C$118 million from the prior year's C$112 million. Total revenue advanced to C$1.382 billion from C$1.346 billion. The results reflected solid business growth, largely in the company's European life business, investment losses in the prior year, and the favorable impact of a new U.K. Annuity reinsurance arrangement in the just concluded quarter.
At the International Banking division, quarterly net loss narrowed to C$57 million from C$100 million reported last year, primarily due to lower loan loss provisions. Total revenue slipped to C$548 million from C$668 million.
In Capital Markets, net income for the quarter increased to C$571 million from C$225 million in the previous year that included significant market environment-related losses. Total revenue was C$1.840 billion in the quarter, up from C$1.409 billion in the prior year.
Corporate Support reported a net loss of C$131 million, compared to a profit of C$49 million last year, reflecting income tax adjustments and unfavorable impact of hedge accounting. The segment reported negative revenue of C$138 million, compared to revenues of C$178 million last year.
Further, provision for credit losses reduced to C$493 million from last year's C$786 million and the previous quarter's C$883 million. Return on common equity was 17.5%, up 300 basis points from 14.5% in the previous year. Tier 1 capital ratio stood at 12.7% at the end of the latest quarter, compared to 10.6% last year.
Gordon Nixon, RBC President and CEO, said, "Our longstanding strategy and diversified business model continues to serve us well as we extend our leadership position in Canada and build on our global platform. We continue to see signs of improvement in market and economic conditions and we are taking advantage of opportunities."
Among peers, Bank of Montreal (BMO, BMO.TO) Tuesday reported a profit for the first quarter that almost tripled from the year-ago period, reflecting a 24% increase in revenues and lower provision for credit losses. The company reported net income for the first quarter of C$657 million or C$1.12 per share, up from C$225 million or C$0.39 per share in the prior-year quarter. Total revenue for the first quarter rose 24% to C$3.03 billion from C$2.44 billion in the same period last year.
Canadian Imperial Bank of Commerce (CM, CM.TO) or CIBC said last week that its first-quarter profit more than quadrupled from the year-ago period, reflecting higher revenues at its retail markets and wholesale banking segments. CIBC's first-quarter net income rose to C$652 million or C$1.58 per share from C$147 million or C$0.29 per share in the year-ago quarter. Total revenues for the quarter grew 51.5% to C$3.06 billion from C$2.02 billion in the year-ago period. However, the company's provision for credit losses increased 26%.
Further, Royal Bank of Canada today declared a quarterly common share dividend of C$0.50 per share, payable on and after May 21 to common shareholders of record at the close of business on April 22.
RY closed Tuesday's regular trade at US$56.15, up from the previous close of US$55.02, on 1.26 million shares.
RY.TO ended Tuesday's regular session at C$58.24, compared to Monday's close of C$57.35, on 3.06 million shares.
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