Royal Bank of Canada’s quarterly profit falls on higher provisions

ROYAL Bank of Canada on Wednesday (Mar 1) posted a decline in first-quarter profit, as the lender set aside higher provisions to brace for potential loan defaults amid a challenging macro environment.

Canada’s biggest lender reported overall net income of C$3.2 billion (S$3.1 billion), or C$2.29 a share, for the quarter ended Jan 31, compared with C$4.1 billion, or C$2.84 a share, a year ago.

The bank reported adjusted earnings of C$3.05 per share, up from C$2.87 a year earlier.

Provisions for bad loans came in at C$532 million for the quarter, up from C$105 million a year ago, mainly reflecting higher provisions in Personal mmercial Banking.

Earnings from Royal Bank’s personal and commercial banking unit rose 8 per cent and wealth management profit was up 3 per cent from a year ago, driven by higher interest rates.

Canada’s central bank in January forecasted that the economy would stall and could tip into recession during the first three quarters of this year.

RBC’s rivals – CIBC and Bank of Montreal – have reported a decline in quarterly profits as they build buffer for loss provisions amid challenging economic conditions. REUTERS