Banks continue to stash away higher loan loss provisions
Royal Bank of Canada (RBC) and National Bank of Canada posted better-than-expected earnings in the first quarter of the year even as both banking giants set aside higher provisions for loan losses, continuing a noted trend among the Big Six banks.
RBC’s adjusted profit for the three months ended January 31 came in at $4.07 billion, or $2.85 a share. That was down from $4.26 billion at the same time last year, but above analysts’ pre-earnings estimates of $2.80 per share.
The bank’s provisions for credit losses increased to $813 million, up 53% from Q1 2023, as leading financial institutions continued to stow away funds amid persistent economic uncertainty.
Revenue for the quarter came in at $13.49 billion, RBC said, an increase from $13.36 billion in the same quarter last year.
National Bank, meanwhile, saw earnings of $922 million, or $2.59 a share, during the quarter – up from $876 million ($2.47 a share) in Q1 2023. That was higher than the $2.36 per share forecast by analysts as quarterly revenue swelled by 4.8% on a year-over-year basis to $2.82 billion.
Credit loss provisions jumped to $120 million at National Bank for the first quarter compared with $86 million a year ago.
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