Royal Bank of Canada raises dividend as profit edges higher

Wed Feb 26, 2014 10:49am EST
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By Cameron French

TORONTO (Reuters) - Royal Bank of Canada (RY.TO: Quote) reported a higher quarterly profit on Wednesday and raised its dividend by 6 percent after surging capital markets income more than offset charges from a restructuring of Caribbean operations.

Canada's largest bank earned C$2.09 billion ($1.89 billion), or C$1.38 a share, in the first quarter ended January 31, up from C$2.05 billion, or C$1.34 a share, a year earlier.

Excluding charges of C$60 million from the sale of Jamaican operations and C$32 million for a restructuring in the Caribbean, the bank earned C$1.47 a share, topping analysts' expectations of C$1.43.

The results build on slightly higher-than-expected profits this week by rivals Bank of Montreal (BMO.TO: Quote) and National Bank of Canada (NA.TO: Quote) in a quarter that has shown steady growth in consumer lending volumes in spite of worries of a housing slowdown.

"(Loan) volume growth in Canada continues to do well, even though we would think the volume growth would be down," said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier.

"(The banks) are fairly well diversified among different loan categories," Nakamoto said. "I think they're quite cautious towards who they lend to."

RBC's capital markets income rose 9 percent to C$505 million, while loan-loss provisions decreased by 16 percent to C$292 million from a year earlier.

"The beat against expectations appears to be from lower provisions and better-than-anticipated capital markets revenues, largely trading," Barclays Capital analyst John Aiken said in a note.   Continued...

A Royal Bank of Canada (RBC) sign is seen in downtown Toronto, March 3, 2011. REUTERS/Mark Blinch