RBC Stock Falls After Reporting Strong Earnings

Royal Bank of Canada (NYSE:RY) stock dipped on Tuesday after reporting strong third-quarter earnings and a record profit last week. The bank's adjusted earnings surpassed analyst estimates, reaching $3.07 per share compared to the forecasted $2.89.

The Toronto-based bank saw revenue climb to $13.282 billion, exceeding the predicted $12.9 billion. Net income rose 11% from a year earlier to 6.02 billion Canadian dollars, while diluted earnings increased 13% to 4.23 Canadian dollars per share.

Wealth management and capital markets were key drivers of growth, with wealth management profit surging 32% to 1.44 billion Canadian dollars due to market gains and net sales boosting fee-based client assets. Capital markets also saw a significant increase, rising 16% to 1.54 billion Canadian dollars, driven by stronger debt and equity underwriting, as well as higher mergers and acquisitions activity and equity trading revenue.

However, personal banking profit slipped 1% to 1.92 billion Canadian dollars due to higher expenses and credit-loss provisions offsetting growth in net interest income. Total provisions for credit losses increased 14% to 1 billion Canadian dollars, with the provision ratio on loans edging up 1 basis point to 36 basis points.