By Patrick Brusnahan
The wealth management arm of Royal Bank of Canada (RBC) saw net income of $777m, a 4% increase year-on-year in Q3 2022.
This totals $33m and was attributed mainly to higher interest rates as well as strong average volume growth.
However, this was offset by higher non-interest expenses, which included staff and technology related costs, as well as higher PCL.
In comparison to the previous quarter, net income is up $27m due to higher net interest income reflecting higher interest rates.
Wealth was a particular aid to the bank in this quarter. Overall, RBC in Q3 2022 saw net income of $3.6bn, or a 17% decrease year-on-year. In addition, lower earnings in Capital Markets, Personal & Commercial Banking and Insurance were offset by higher results in Investor & Treasury Services and Wealth Management.
Compared to last quarter, net income was down $676m or 16% with lower results in Capital Markets, Personal & Commercial Banking, Corporate Support and Insurance.
Diluted EPS was $2.51, down 15% year-on-year. Furthermore, consolidated results reflect $340m of provisions primarily taken on loans in the current quarter, mainly due to “unfavourable changes” in the bank’s macroeconomic outlook.
Dave McKay, RBC President and chief executive, said: “In an uncertain world, we continue to operate from a position of strategic and financial strength. Our balance sheet is strong and our talented team is as focused as ever on delivering the innovative products, insightful advice and leading partnerships that our clients count on. Looking ahead, our size, scale and diversified business model will continue to create value for our clients, communities and shareholders.”
In April, RBC was set to give its affluent customers access to the highly sought after private-credit market.
The Canadian financial services company was negotiating with various fund managers including Brookfield Oaktree Wealth Solutions and Blue Owl Capital to offer this service.
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