RBC tops analysts' expectations, but increases provisions for credit losses

financialpost.com:

Higher profits in Royal Bank of Canada‘s personal and commercial banking, wealth management and capital market segments allowed the country’s biggest bank to top analysts’ expectations in the first quarter.

Its net income for the three months ending Jan. 31 was $5.1 billion, up $1.5 billion or 43 per cent from the same quarter a year ago, resulting in net earnings per share of $3.54. Including HSBC Bank Canada’s operations increased net income by $214 million, the bank said.

The bank reported adjusted net income of $5.3 billion, up 29 per cent from a year ago, resulting in adjusted earnings per share of $3.62, which beat analysts’ expectations of $3.25 per share.

“RBC’s first quarter exemplifies our commitment to staying ahead of our clients’ expectations in an increasingly complex world,” chief executive Dave McKay said in a statement. “In Q1, we delivered strong results and client-driven growth across our businesses, while prudently managing risk and making investments in technology and talent to position the bank for the future.”

RBC’s total provisions for credit losses (PCLs) — the amount of money banks keep aside to tackle potentially bad loans — increased $237 million, or 29 per cent from a year ago and 25 per cent from the fourth quarter of 2024, to $1.05 billion due to higher provisions in commercial banking, personal banking and wealth management.