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Royal Bank of Canada profit grows 20 per cent
RICHARD BLACKWELL
Friday, August 25, 2006
Royal Bank of Canada reported profit of .18-billion in its third quarter of 2006, a 20 per cent increase from 9-million in the same quarter a year earlier.
Diluted per share profit was 90 cents, compared to 74 cents in the year-earlier quarter.
On a cash basis, profit per share was 91 cents, well ahead of analysts' expectations of 84 cents.
The bank also announced a boost in its quarterly dividend by 4 cents a share to 40 cents.
Revenue was .21-billion, up 6 per cent from .93-billion a year earlier. The company said it had strong revenue growth in all its business segments.
In a statement, chief executive officer Gordon Nixon said the bank's strong performance “reflects our continuing momentum from the strength of our franchise as we successfully execute our growth initiatives in North America and abroad. Our business segments continued to deliver solid results this quarter.”
Return on equity was 23.1 per cent in the third quarter, up from 20.2 per cent in the year-earlier period.
Canadian personal and business banking had a record quarter, with profit up 9 per cent from a year earlier to 2-million, the bank said.
Personal and business banking in international markets, including the U.S., also did well despite the strengthening of the Canadian dollar, Royal said, with profit up 38 per cent to 1-million.
And RBC Capital Markets — the company's investment banking business — reported 29 per cent profit growth to 9-million, thanks to improved market conditions, a lower tax rate, and lots of merger activity in Canada.
Royal Bank shares dropped on Friday, moving down about 1.1 per cent, or 58 cents, to .12 in early afternoon trading on the Toronto Stock Exchange.
Analyst Jason Bilodeau of UBS Securities Canada Inc. said in a note that while Royal reported a “good number,” it may fall short of expectations in the wake of Toronto-Dominion Bank's profit figure reported Thursday. TD's third quarter net income was up 92 per cent to 0-million.
Royal shares have risen about ten per cent since the start of 2006.
© The Globe and Mail |
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