RBC Q4 2012 earnings up 17%

Royal Bank of Canada has reported record net income of $7.5 billion for the year ended October 31, 2012, up $1.1 billion or 17% from the prior year.

Earnings from continuing operations of $7.6 billion were up $620 million, or 9% from the prior year. Its results reflect record earnings in Personal & Commercial Banking, Capital Markets and Insurance.

“This year, we extended our leadership position and executed our long-term growth strategy, while maintaining our prudent risk and disciplined cost management,” says Gord Nixon, RBC president and CEO.

Strong volume growth across all of its Canadian banking businesses, higher fixed income trading and corporate and investment banking results also drove its performance.

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RBC’s results were partially offset by higher costs in support of business growth, moderated by cost management initiatives and increased provision for credit losses (PCL) in wholesale and Caribbean portfolios.

Wealth management net income was $207 million, up $28 million or 16% from last year. The increase was driven by higher average fee-based client assets, higher transaction volumes and the increase in the fair value of our U.S. share-based compensation plan.

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Insurance net income was $194 million, down $6 million or 3% from last year. The bank says lower claims costs in Canadian insurance products and reinsurance products were offset by lower net investment gains.

Also, no new U.K. annuity reinsurance contracts were made in the current quarter. Compared to the prior quarter, net income was up $15 million or 8%, driven by lower claims costs in our reinsurance products and Canadian insurance products.

Capital markets net income was $410 million, a boost of $285 million from the prior year. It primarily reflects higher fixed-income trading results.

Increased origination reflecting solid issuance activity, as well as strong client growth in lending also contributed. These factors were partially offset by higher equity origination volumes primarily in the U.S. and Canada.

Personal and commercial banking net income was $1,034 million, up $87 million or 9% over last year. Solid volume growth and a lower effective tax rate in Canada helped the bank get ahead, though earnings were partially offset by increased costs in support of business growth.

In Q4 2012, total PCL was $362 million, up over last year due to amplified provisions in its wholesale portfolio.

Staff

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