Royal Bank of Canada (NYSE: RY) is trading firm today post their strong third quarter of 2017 results. As a result, the stock surged over 1.6% (as of 12:58PM EDT; August 23rd, 2017; Source: Google finance) leading to a total rise of over 9.9% in this year to date.
The group’s Wealth Management division showed strong performance with Net income rising 25% yoy to $486 million driven by rise in average fee-based client assets on the back of capital appreciation and net interest income. Investor & Treasury Services segment’s Net income rose 13% yoy to $178 million during the third quarter of 2017 driven by higher client activity, and funding and liquidity results given the interest rate movements. Personal & Commercial banking division’s Net income rose 6% yoy to $1,399 million during the third quarter of 2017. Canadian Banking net income enhanced 5% yoy to $1,349 million on the back of rising volume of 7% which offset by lower spreads.
Insurance segment’s Net income fell 56% yoy to $161 million during the third quarter of 2017 and without the gain from the sale of their home and auto insurance manufacturing business in the prior year, the net income enhanced $32 million or 25%. Capital Markets Net income fell 4% yoy to $611 million on the back of lower fixed income trading results due to decrease in market volatility, higher costs related to changes in the timing of deferred compensation, and decreased results from Municipal Banking in the U.S.
On the other hand, net income fell 3% yoy to $2,796 million during the third quarter ended July 31, 2017, but without an after-tax gain of $235 million from the sale of our home and auto insurance manufacturing business in the prior year, the net income rose 5%.
However, Credit quality is decent, with a provision for credit losses (PCL) ratio of 0.23% and have a a Common Equity Tier 1 (CET1) ratio of 10.9%. Moreover, they enhanced their quarterly dividend by $0.04 or 5% to $0.91 per share. The bank also achieved the highest ranking in overall customer satisfaction for the second year in a row.