March 3, 2011 / 11:21 AM / in 7 years

UPDATE 2-Royal Bank of Canada profit jumps 23 percent

* Q1 adj EPS C$1.26 vs est C$1.01

* Loan-loss provisions fall 32 pct

* Int‘l banking unit turns profit (Adds details, background)

TORONTO, March 3 (Reuters) - Royal Bank of Canada’s (RY.TO) first-quarter results rose 23 percent, surpassing modest expectations on the back of lending growth and lower provisions for bad loans, the bank said on Thursday.

RBC, Canada’s largest lender, earned a record C$1.84 billion ($1.90 billion), or C$1.24 a share, in the first quarter ended Jan. 31, up from C$1.50 billion, or C$1.00 a share, a year earlier.

Excluding items, the bank earned C$1.26 a share, easily topping the profit of C$1.01 a share expected by analysts polled by Thomson Reuters I/B/E/S.

RBC, the fourth big Canadian bank to report first-quarter results, followed the trend of strong retail loan growth and surprisingly healthy investment banking returns that have driven its competitors to better-than-expected profits.

Analysts have predicted that retail loan growth would slow this year as borrowers try to reduce debt levels in anticipation of higher interest rates.

Provisions for bad loans fell 32 percent to C$334 million.

Canadian personal and commercial banking income rose 14 percent to C$882 million due to solid loan growth, investment banking results climbed 7 percent to C$613 million.

International banking, which in recent years has been a weak spot for the bank, turned a profit of C$24 million, compared to a loss of C$57 million last year. This was due in part to lower loan losses at RBC’s Caribbean bank and its North Carolina-based U.S. bank.

Return on equity was 20.3 percent, up from 17.5 percent a year earlier. ($1=$0.97 Canadian) (Reporting by Cameron French; Editing by Lisa Von Ahn and Derek Caney)

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