RBC profit surges, surpasses estimates

Thu Aug 27, 2009 7:33am EDT
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By Andrea Hopkins

TORONTO (Reuters) - Royal Bank of Canada said on Thursday its earnings surged 24 percent in the third quarter as a big jump trading revenue more than offset higher loan-loss provisions.

Canada's largest bank roared past analysts' estimates for the quarter, reporting net income of C$1.56 billion, or C$1.05 a share, in the third quarter that ended July 31. That was up from C$1.26 billion, or 92 Canadian cents a share, a year earlier.

Excluding one-time items, diluted earnings per share were C$1.18, well above analysts' expectations for earnings of 93 Canadian cents a share before exceptional items, according to Reuters Estimates.

"Royal destroyed consensus," said Dundee Securities analyst John Aiken. "It was a good quarter all around, with very few complaints."

The amount of money the bank set aside for bad loans more than doubled to C$770 million, from C$334 a year earlier, but the credit troubles were more than offset by the overall strength of earnings.

The bank continued to build capital. The Tier I capital ratio climbed to 12.9 percent, above most Canadian competitors and far beyond that of global rivals.

The dividend was unchanged at 50 Canadian cents a share.

RBC's shares closed at C$53.09 Wednesday on the Toronto Stock Exchange.

($1=1.099 Canadian Dollar)

(Additional reporting by Krishna Chaithanya in Bangalore; Editing by Maureen Bavdek)

<p>A Royal Bank of Canada (RBC) logo is seen at a branch in Toronto November 9, 2007. REUTERS/Mark Blinch</p>