The Globe and Mail

Royal Bank of Canada’s profit slipped 1 per cent lower in the fiscal fourth quarter, hobbled by weak returns from capital markets and insurance.

Canada’s largest bank by assets also reported a spike in provisions for credit losses, or the money banks set aside to cover bad loans, to $499-million. Provisions increased 41 per cent from a year earlier, when they were unusually low, rising in each of the bank’s three largest divisions.

RBC said it earned $3.21-billion, or $2.18 per share, compared with $3.25-billion, or $2.20 a share in the same quarter a year earlier.

Adjusted to exclude certain items, RBC said it earned $2.22 per share. On average, analysts had expected adjusted earnings of $2.28 a share, according to Refinitiv.

For the full fiscal year that ended Oct. 31, RBC’s profit was $12.87-billion, up 4 per cent from a year earlier, and earnings per share improved 5 per cent to $8.75.

“Against a challenging macroeconomic environment, we delivered solid results in 2019,” said Dave McKay, RBC’s chief executive officer, in a news release.

The bank held its quarterly dividend steady at $1.05 per share.

Profit from RBC’s core personal and commercial banking division increased 5 per cent to $1.62-billion, as Canadian loans and deposits grew by 6 per cent and 10 per cent, respectively. And wealth-management profit rose 32 per cent to $729-million, though most of the gain came from a sale that spun off the private-debt business of BlueBay Asset Management, worth $134-million after tax.

But capital-markets profit fell 12 per cent to $584-million year over year, due to lower investment-banking fees and higher provisions for loan losses. And in the insurance division, profit dropped 11 per cent to $282-million.

A revamp of the bank’s troubled investor- and treasury-services business incurred severance pay that dragged the division’s profit down 71 per cent from a year earlier, to $45-million.

On Wednesday, RBC also announced it has appointed telecommunications and media executive Maryann Turcke to its board of directors, starting in January. Ms. Turcke is chief operating officer of the National Football League and previously spent 12 years BCE Inc., including a stint as president of Bell Media.

Source: The Globe and Mail

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