IBOS member Royal Bank of Canada (RBC) has today, 22 August 2018, announced a record net income of $3,109 million for Q3 2018, in a report ending 31 July 2018.
RBC’s record net income is up $313 million (11%) in comparison to Q3 2017, with a double-digit diluted EPS(1) growth of 14%. Strong earnings in Personal & Commercial Banking and Wealth Management reflected benefits from North American interest rates and client volume growth. Strong Capital Markets earnings were driven by solid results across all geographies.
Q3 2018’s strong performance also reflects relatively stable credit quality with provision for credit losses (PCL) on impaired loans ratio of 17 basis points (bps) and PCL ratio on loans of 23 bps.
Compared to Q2 2018, net income was up $49 million (2%), mainly reflecting higher earnings in Personal & Commercial Banking, Wealth Management and Capital Markets.
RBC’s capital position was strong with a Common Equity Tier 1 (CET1) ratio of 11.1%. Additionally, today RBC also announced an increase to its quarterly dividend of $0.04 (4%) to $0.98 per share.
RBC’s Personal & Commercial Banking sector had a net income of $1,510 million, an increase of $111 million (8%) from last year. This mainly reflected an improved deposit spreads resulting from higher Canadian interest rates, and average volume growth of 5%, primarily driven by solid growth in Canadian residential morgages, commercial lending and deposit products. Non-interest income growth benefited from market performance and strong credit card purchase volume growth – these factors were partially offset by higher PCL. RBC also generated strong operating leverage of 5% in Canadian Banking, notwithstanding higher staff-related costs and technology investments.
In regards to the firm’s digital initiatives, 90-day Active Mobile users increased 18% from a year ago to 3.7 million, resulting in a 22% increase in mobile sessions. Overall, digital adoption increased to 49%. The bank also introduced RBC Ventures in Q3 2018, going beyond banking to solve real-world problems. To date, RBC has successfully launched nine ventures with a further ten under development.
Read the full report via RBC here.