Royal Bank Of Canada Net Income Dented Amid Economic Headwinds

Editorial Staff 24 August 2022

Royal Bank Of Canada Net Income Dented Amid Economic Headwinds

Improved wealth management results helped to offset some of the declines in other areas, the Canadian banking group said.

Royal Bank of Canada announced today that its net income for the three months to July 31 fell 17 per cent year-on-year to C$3.6 billion ($2.76 billion) as global economic conditions grew more challenging. 

Earnings per share on a diluted basis fell 15 per cent to C$2.51 per share, the Toronto-based group said in a statement today. 

Results reflected C$340 million of provisions primarily taken on loans in the latest quarter, mainly due to unfavorable changes in the macroeconomic outlook, compared with releases of provisions, largely on loans, of C$540 million in the prior year, RBC said.

Lower earnings in capital markets, personal and commercial banking and insurance were partially offset by higher results in investor and treasury services and wealth management.

Pre-provision, pre-tax earnings of C$4.9 billion fell 3 per cent, mainly due to lower revenue in capital markets. Higher salaries, technology investments and discretionary costs to support client-driven growth, also contributed to the decrease in the earnings' result.

Wealth management
Net income of C$777 million rose by 4 per cent from a year ago, mainly due to higher net interest income driven by higher interest rates and strong average volume growth. This was partially offset by higher non-interest expenses, including staff and technology related costs. Non-interest income was impacted by challenging market conditions.

The bank had a Common Equity Tier 1 ratio of 13.1 per cent.

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