Wealth Management Earnings Shine At RBC

Editorial Staff

6 December 2019

Royal Bank of Canada this week reported a year-on-year rise in net income in wealth management, at C$729 million from C$639 million, for the three months ending 31 October. For the full year, net income also rose to C$2.55 billion from C$2.265 billion

The outcome was mainly driven by higher average fee-based client assets reflecting market appreciation and net sales, as well as higher net interest income driven by average volume growth at City National Bank.

Net income also included a gain on the sale of the private debt business of BlueBay . "These factors were partially offset by increased costs in support of business growth, higher variable compensation commensurate with revenue growth and higher PCL,” RBC said in a statement.

For the group as a whole, Toronto-listed RBC reported record net income of C$12.871 billion for the 12-month period, rising by 4 per cent from the prior year, with diluted EPS growth of 5 per cent. Results reflected “strong earnings growth” in personal and commercial banking and wealth management. Net income for the year ending 31 October was C$12.871 billion, rising from C$12.431 billion.

Gains were partly offset by lower earnings in investor and treasury services, primarily due to lower funding and liquidity revenue and severance and related costs associated with repositioning the business, and in capital markets, due to a challenging market environment.

RBC said that its Common Equity Tier 1 ratio – a standard international measure of capital strength - was 12.1 per cent, up by 60 bps from the prior year.

Across the firm, total assets under management as at 31 October were C$762.3 billion, up from C$671 billion from 31 October a year earlier.