Royal Bank of Canada notched a record annual profit of $12.4 billion for its 2018 fiscal year, up 8 per cent over the previous year, with the lender’s bottom line boosted by higher interest rates and lower taxes.
“Our diversified business and geographic mix delivered good revenue growth, while we prudently managed risk and delivered a premium return on equity,” said Dave McKay, president and chief executive officer of RBC, in a release on Wednesday.
“Looking ahead, we remain focused on investing in our people and technology, and offering more personalized insights and connectivity to deliver more value for both our clients and shareholders.”
The Toronto-based bank saw particularly rapid growth from its wealth management business for the year ended Oct. 31, as the unit recorded a 23-per-cent increase in its earnings compared to fiscal 2017, rising to nearly $2.3 billion.
RBC said the jump was driven by greater average fee-based client assets, as well as an assist from higher U.S. interest rates and tax reform.
In personal and commercial banking, RBC said net income was up by five per cent, to $6 billion, which was helped along by higher interest rates and higher credit-card purchase volumes.
The bank reported results for its fourth quarter ended Oct. 31 as well, which saw earnings increase by 15 per cent to $3.3 billion, powered by the performances of a majority of the lender’s businesses, including a 20-per-cent increase in year-over-year net income for its insurance unit, to $318 million.
RBC reported earnings per share of $2.20 for the quarter, up 17 per cent from a year ago, and managed to beat analyst expectations for the three-month period by reporting adjusted earnings per share of $2.24.
A note from Canaccord Genuity called the beat “low quality from a lower tax rate.”
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