Wealth management net income at Royal Bank of Canada fell by 29 per cent year-on-year to C$90 million (around $86 million)  in the three months to 30 April, primarily due to an unfavourable accounting impact of C$68 million related to foreign currency translation on certain AFS securities, the bank said yesterday.

Excluding the accounting impact, net income at the wealth arm of the Toronto-listed bank stood at C$151 million, up C$25 million or 20 per cent over the year.

Higher fee-based revenue and higher transaction volumes were partially offset by spread compression, and the impact of a stronger Canadian dollar relative to the US dollar which reduced earnings by C$12 million.

“Our Canadian wealth and global asset management businesses generated strong earnings growth over last year, fuelled by higher average fee-based client assets and volumes. Solid momentum in our US & International businesses was muted by the impact of foreign currency translation and spread compression from the continued low interest rate environment. We are leveraging our global capabilities across all of our businesses, to better serve our clients and capitalize on the attractive long-term trends in the industry," said Gordon Nixon, RBC president and chief executive.

Royal Bank of Canada, for the entire group, reported net income of C$1.329 billion for the quarter ended April 30 2010. Last year, it reported a net loss of C$50 million, largely reflecting a goodwill impairment charge of C$1 billion. Excluding the goodwill impairment charge, net income was up $379 million, or 40 per cent from last year.