IBOS member Royal Bank of Canada (RBC) has reported a net income of $2,809 million for Q2 2017 ended 30 April, up $236 million (9%) from a year ago.
RBC’s results reflect strong earnings in Capital Markets, Investor & Treasury Services, and Wealth Management, as well as solid earnings in Personal & Commercial Banking. RBC also remains well-capitalised with a Common Equity Tier 1 (CET 1) ratio of 10.6%.
Capital Markets net income of $668 million was up $85 million or 15% from a year ago, driven by higher results in Corporate and Investment Banking and Global Markets reflecting increased client activity driven by improved market conditions, and lower PCL.
Investor & Treasury Services net income of $193 million was up $54 million or 39% from a year ago, mainly driven by higher funding and liquidity earnings reflecting volatility in interest and foreign exchange rates, and tightening credit spreads.
Wealth Management net income of $431 million was up $45 million or 12% from a year ago, mainly due to increased earnings resulting from growth in average fee-based client assets which benefited from favourable equity markets, and higher net interest income reflecting volume growth and the impact from higher US interest rates.
Personal & Commercial Banking net income of $1,360 million was up $63 million or 5% from a year ago.
Dave McKay, President and Chief Executive Officer at RBC, commented:
“RBC had a strong second quarter, with earnings of $2.8 billion, reflecting solid growth across most of our businesses and prudent risk management. I’m very pleased with our performance for the first half of the year given the uncertain operating environment. Our strong capital position allowed us to repurchase over 30 million of our common shares so far this year.
Innovation is core to RBC, and we continue to invest in building a digitally-enabled relationship bank to better serve our clients while delivering sustainable earnings growth.”
Below are the financial highlights from Q2 2017, compared to Q2 2016:
- Net income of $2,809 million (up 9% from $2,573 million)
- Diluted EPS of $1.85 (up $0.19 or 11% from $1.66)
- Return on common equity (ROE) of 17.2% (up 100 basis points (bps) from 16.2%)
- CET1 ratio of 10.6% (up 30 bps from 10.3%)
Access the full press release via RBC here.