Royal Bank hikes dividend after posting $2.8B quarterly profit
Royal Bank of Canada is reporting nearly $2.8 billion of net income for its fiscal third quarter and an unexpectedly large increase to its quarterly dividend.
RBC's net income was down three per cent from last year when its bottom line was boosted by the sale of an insurance business, which also reduced the bank's overall revenue.
Total revenue for the three months ended July 31 was $9.99 billion, down 2.6 per cent from a year ago.
Excluding one-time items, Royal Bank's net income was up five per cent from the third quarter of fiscal 2016.
The profit amounted to $1.85 per share of net income under generally accepted reporting, or $1.89 per share on an adjusted cash basis.
Chief executive Dave McKay described the quarter's results as "solid" and announced RBC's quarterly dividend will be going up five per cent to 91 cents per share.
Banking analyst John Aiken of Barclays Capital said in a note to clients that the dividend increase was twice as big as expected and overall performance was better than anticipated.
"Although we and the Street had been expecting a drop in RY's earnings after a strong second quarter, RY managed to exceed expectations on the back of impressive performances in its retail bank and wealth management platforms," Aiken wrote.
The Royal Bank is the first of Canada's six biggest banks to report third-quarter financial results this year. CIBC reports on Thursday and the others report next week.