Canada's RBC beats profit estimates on HSBC addition, wealth management strength

(Reuters) -Royal Bank of Canada, the country's top bank by market capitalisation, reported fourth-quarter profit above analyst expectations helped by its acquisition HSBC's domestic business this year and strength at its wealth management division.

The $10 billion acquisition of HSBC's Canadian operation helped RBC grow its retail business, adding about 780,000 clients to its retail and commercial business and expanding its mortgage and corporate loan books.

The wealth management division, which includes U.S. subsidiary City National, was a bright spot with net income rising more than three fold to C$969 million and recording a recovery loan loss provisions of C$25 million, largely helped by higher fees and as it recovers from impaired losses from a year ago.

RBC also rejigged its leadership earlier this year and made changes to its business segments as the lender positions itself for the next phase of growth while absorbing HSBC's domestic operations.

Still, RBC set aside more than expected funds for potentially souring loans in the fourth quarter, highlighting the strain on consumers who are struggling to pay their mortgages and credit card bills despite a series of central bank rate cuts.

Provision for credit losses came in at C$840 million ($597.27 million) in the three months ended October 31, compared with C$720 million a year ago. Analysts had forecast C$831.7 million, according to LSEG data.



The bank's adjusted net income rose 17.7% to C$4.44 billion. On a per share basis, RBC earned C$3.07, 6 Canadian cents higher than the analysts' average estimate.

($1 = 1.4064 Canadian dollars)

Source: Investing.com