WRAPUP 1-Canada's Royal Bank, National Bank beat estimates on markets strength, fewer provisions
Reuters
Published Aug 26, 2020 07:47
TORONTO, Aug 26 (Reuters) - Royal Bank of Canada RY.TO and National Bank of Canada NA.TO comfortably beat estimates for third-quarter profit on Wednesday as they took fewer loan-loss provisions than expected and benefitted from a recovery in financial markets.
Royal Bank, Canada's biggest lender, attributed its better-than-expected performance in the three months through July to record earnings in its capital markets business, whose profit jumped 45% from a year ago. Bank, the smallest of Canada's six major lenders, posted a more modest 5% increase in profit from its financial markets business. banks, which were conservative in setting aside money to cover bad loans in the prior quarter, took half the provisions for credit losses (PCL) that analysts had expected. Royal Bank set aside C$675 million ($512.49 million), while National Bank posted provisions of C$143 million.
Investors had surmised before the results announcements that extended and expanded assistance programs that helped keep borrowers in decent shape likely kept in check the formation of bad loans at Canadian banks. also helped support capital levels, with RBC posting an increase in its Common Equity Tier 1 ratio - the core measure of a bank's capital - from the prior quarter to 12%, while National Bank maintained its level of 11.4%. Both were well above the regulatory requirement of 9%.
RBC reported adjusted diluted earnings per share of C$2.23 in the quarter, compared with analyst expectations of C$1.88. National Bank posted adjusted EPS of C$1.66 versus estimates of C$1.30. ($1 = 1.3171 Canadian dollars)
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Written By: Reuters
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