Royal Bank of Canada's Earnings Hit by Tax Charge --Update

By Allison Prang

Profits fell slightly at Royal Bank of Canada in its latest quarter as the company recorded a charge from the new U.S. tax law.

RBC, which has the largest market capitalization of the Canadian banks, said it made 3.01 billion Canadian dollars ($2.37 billion), or C$2.01 a share, in its first quarter, compared with C$3.03 billion, or C$1.97 a share, in the year-earlier period. The year-ago quarter also contained a C$212 million benefit from the sale of Moneris's U.S. operations.

RBC, while based in Toronto, provides wealth management, commercial and private banking, and capital-markets services in the U.S., where 16% of its employees are based.

While RBC's first-quarter results included a C$178 million charge related to the revaluation of deferred tax assets, the bank said it expects U.S. tax-law changes to give earnings a C$250 million boost in fiscal 2018.

Analysts polled by Thomson Reuters were expecting adjusted earnings

of C$1.99 per share.

Profit from RBC's personal and commercial banking segment fell 4.5% to C$1.52 billion. Profit in the company's wealth-management segment rose 39% to C$597 million, but fell 5.2% in its insurance division to C$127 million.

The company's capital-markets segment, its second-largest by profit, reported profits of C$748 million, up 13% from a year ago, while investor and treasury services profit rose 2.3% to C$219 million.

Also, RBC said it was raising its quarterly dividend to C$0.94 From C$0.91 and it authorized a new program to buy back up to 30 million shares over the next 12 months.

Revenue rose 12% to C$10.82 billion, while noninterest expenses rose 5.3% to C$5.61 billion.

In the past year, the bank's shares have risen 4%.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

February 23, 2018 08:15 ET (13:15 GMT)

Royal Bank of Canada (TSX:RY)
Historical Stock Chart
From Mar 2024 to Apr 2024