Canada's Royal Bank hits C$3 billion quarterly profit
TORONTO (Reuters) - Royal Bank of Canada (RY.TO: Quote) on Friday reported quarterly earnings of more than C$3 billion ($2.3 billion) for the first time, beating market forecasts, and benefiting from a strong performance at all its businesses.
Canada's biggest bank said on Friday net income for the first quarter to Jan. 31 rose by 24 percent to C$3.03 billion.
Earnings per share increased to C$1.97 from C$1.58 a year earlier, exceeding analysts' forecasts of C$1.77, according to Thomson Reuters I/B/E/S.
Shares in RBC, which has a substantial business in the United States, have risen by nearly 20 percent since Donald Trump's election as U.S. president in November.
The stock has benefited from expectations the new administration will introduce softer banking regulations and a lower corporate tax rate and that pro-growth policies will lead to higher interest rates.
Chief Executive Dave McKay said that the bank's U.S. strategy is focused on organic growth following its $5 billion acquisition of Los Angeles-based City National in 2015.
"Our large focus in the United States right now is executing organic growth within City National and organic growth within the capital markets franchise. We continue to see opportunities to deploy capital organically," he said on a conference call.
McKay added that rising valuations for U.S. banks following Trump's election make it harder to do deals in the current environment.
"You look at the prices of U.S. banks and the ability to generate synergies and return on capital remains challenging at best so we're obviously very conscious of shareholder return as we look at tuck-in acquisitions for City National," he said. Continued...