Canada’s RBC’s third-quarter earnings beat market expectations

Net income from the bank’s wealth management division increased by 36 percent to C$388 million, benefiting from the contribution of Los Angeles-based City National, which RBC acquired for $5 billion previous year.

The bank (TSX:RY) had a profit of $2.475 billion during the same quarter a year ago. The third-quarter profit was boosted by an after-tax gain of CA$235 million from selling its home and auto insurance business to Aviva Canada Inc.

The bank, based in Toronto, said it had earnings of $1.29 per share. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $1.31 per share.

“We remain focused on prudently managing risks and costs while innovating to enhance the client experience and deliver long-term shareholder value”, McKay added.

On Wednesday, the Royal Bank of Canada declared its third-quarter results which thrashed market anticipations, with funds reserved to cover bad loans falling due to higher oil prices.

Net income at the Wealth Management division surged 36% to CA$388 million from previous year.

The bank’s capital markets division reported net income of C$635 million, up 17 percent from a year ago, helped by an increase due to foreign exchange movements.

RBC claimed that its provisions for credit losses had decreased to an equivalent of 0.24 percent of its total loans during the quarter, down 12 basis points, mostly because of lowered provisions in the oil and gas sector.

However, despite the increased payout, shares still dropped on the New York Stock Exchange and are now trading down 0.4 per cent at $63.35.