The Royal Bank of Canada (RBC) has recorded a net income of C$4 billion ($3.3 billion) in second-quarter results representing a growth of 63% from C$1.48 billion ($2.07 billion) posted during a similar period a year ago.
In a statement, RBC said the income was driven by the growth of its capital markets and wealth management segments. During the quarter, the bank also released some reserves meant to cover loan losses.
RBC also posted C$2.76 ($2.29) per share during the quarter, but analysts had projected C$2.48 ($2.05) price per share.
Furthermore, the lender also registered pre-tax earnings of C$5.1 billion ($4.23 billion), up 11% from a year ago. According to RBC, the surge is mainly due to constructive markets and strong volume growth.
RBC expects recovery from pandemic to continue
RBC CEO Dave McKay reflected on the results while explaining the drivers behind the growth amid recovery from the pandemic. According to McKay:
“The strong momentum we’ve achieved in the first half of 2021 reflects our focused strategy to deliver exceptional experiences and create more value for clients. While there is reason for optimism as recovery continues to take hold, we know the pandemic’s path forward still poses challenges.”
Elsewhere, Pauline Bell, an analyst with research firm CFRA in April, said RBC is cushioned against the impact of low-interest rates. Therefore the bank has the upper hand compared to other Canadian lenders.
Bell noted that the bank had adopted a cautious mortgage lending approach, minimizing real estate portfolio risks. He projects RBC to keep growing with its presence in the United that offers a unique opportunity.