RBC hikes dividend as profit beats expectations
Royal Bank of Canada on Wednesday reported higher fourth-quarter profits than it did last year, exceeding analyst expectations.
On an adjusted basis, the bank earned $4.4 billion, up 18 per cent from a year ago, resulting in earnings per share of $3.07. Analysts had expected the bank to earn $3.01 per share, according to Canaccord Genuity Corp.
Net income for the three-month period ending Oct. 31 was up seven per cent compared to the same period last year to $4.2 billion, resulting in earnings per share of $2.92.
The lender said the increase was due to better results in personal and commercial banking, wealth management and insurance. The inclusion of HSBC Canada increased the bank’s net income by $265 million, it said.
RBC’s total provisions for credit losses (PCL) — the amount of money banks keep aside to tackle potentially bad loans — increased $120 million, or 17 per cent from a year ago, to $840 million due to higher provisions in commercial and personal banking.
PCL on performing loans, loans the banks are likely to get back, increased $14 million, or seven per cent, from a year ago while PCL on impaired loans, loans the bank may not get back in their entirety, increased $101 million, or 19 per cent.
RBC increased its quarterly dividend by six cents to $1.48 per share.
“In 2024, RBC relentlessly pursued our ambition to stay ahead of evolving client expectations and create unparalleled value,” chief executive Dave McKay said in a statement. “Our premium franchises delivered diversified revenue growth, underpinned by a strong balance sheet and prudent risk management.”
RBC also elevated a new generation of leaders during the year, he said.
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