(Toronto) The Royal Bank of Canada says it is rewarding its shareholders as its second quarter profit increased compared to last year and as it successfully completed its acquisition of HSBC Canada. Investors appreciated, with shares of the country’s largest bank gaining more than 5% in Toronto on Thursday.
The bank said Thursday it will now pay a quarterly dividend of $1.42 per share, an increase of 4 cents. It also announced plans to repurchase up to 30 million of its shares.
The moves come as RBC said it earned $3.95 billion, or $2.74 per share, for the quarter ended April 30, up from $3.68 billion, or $2.60 per share, a year earlier, helped in particular by record revenues from capital markets.
“This quarter, we saw strong growth across diversified revenue streams,” said Dave McKay, president and CEO of Royal Bank, during a conference call on the results.
He said the bank’s capital generation means it has growth options, including possible acquisitions, even as the bank returns more money to shareholders.
“This enormous capital that we generate inorganically gives us significant strategic flexibility,” he argued.
RBC leads for performance
RBC also now has a wide range of growth options within the bank, including making the most of its $13.5 billion acquisition of HSBC Canada.
The approximately 4,500 employees incorporated by RBC as part of the acquisition are now freed from the uncertainty surrounding the transaction and the obstacles it could pose in attracting clients, he maintained.
“They were on the defensive for 18 months, and now we’re on the offensive and you can see the excitement in their eyes to come back,” Mr. McKay said.
PHOTO PROVIDED BY RBC
Dave McKay
Revenues totaled 14.15 billion, compared to 12.45 billion in the same quarter last year, while the bank’s provision for credit losses stood at 920 million for the quarter, compared to 600 million a year ago. is one year old.
On an adjusted basis, RBC says it earned $2.92 per share, up from adjusted earnings of $2.68 per share a year earlier.
Analysts on average expected earnings of $2.75 per share, according to LSEG Data & Analytics.
These results place RBC first among banks for the quarter in terms of performance, said Meny Grauman, analyst at Scotiabank.
“With the results of the big six Canadian banks, we would put RBC at the top of the category this quarter,” he said in a note.
RBC said its personal and commercial banking businesses brought in $2.05 billion, up from $1.92 billion in the same quarter last year, while its wealth management businesses brought in $769 million, up from 719 million a year ago.
The bank’s insurance activities generated 177 million in the second quarter, up from 170 million in the same quarter last year.
RBC’s capital markets activities generated $1.26 billion, up from $962 million a year ago, driven by increased mergers and acquisitions, loan syndication and loan origination activities. equity and debt securities.
The bank’s business support sector posted a loss of 309 million for its latest quarter, compared to a loss of 86 million a year ago.