Royal Bank of Canada Reports 4th Quarter Results
Canada’s largest bank, Royal Bank of Canada (NYSE: RY – $64.19) announced fourth quarter earnings of $2.119 billion, up 11% from the prior year, driven by strong growth in its Corporate and Investment Banking business; higher earnings in the Retail Banking division reflecting solid volume growth of 7%; higher average fee-based client assets in Wealth Management and improved business performance in Investor Services. A lower effective tax rate, largely reflecting a $124 million income tax adjustment related to prior years, and lower provisions for credit losses also contributed to the increase. These factors were partly offset by a charge of $118 million after-tax in its Insurance business related to proposed legislation in Canada. Excluding certain items, the bank earned C$1.42 a share in the quarter vs. Street expectations of C$1.38. For the full-year ended October 31, RY earned a record C$5.54 per share up from fiscal 2012’s C$4.93. In other news, CEO Gordon Nixon said he would step down next summer after 13 years in his position and will be replaced by Dave McKay, who runs RBC’s Retail Banking division. The shares have been trading at near-record highs as earnings have shown good signs of strength and fiscal 2014 should provide for more good news. The company pays an annualized dividend of US$2.68, yielding 4.2%.