Banking giants buck trends with third-quarter profits
Royal Bank of Canada (RBC) and National Bank of Canada revealed solid third-quarter financial results on Wednesday (August 28), reporting higher year-over-year profits and ending a string of underwhelming Q3 earnings announcements by the country’s banking giants.
RBC’s performance was better than analysts had expected, with the bank earning an adjusted $3.26 per share in Q3 – above the $2.97 average estimate of analysts surveyed by Bloomberg.
Canada’s biggest lender reported overall adjusted net income of $4.7 billion, a jump of 18% from the same time last year, as provisions for credit losses dropped to $659 million compared with $920 million the prior quarter.
National Bank, meanwhile, reported adjusted earnings per share of $2.68 for the quarter, rising from $2.18 in 2023’s third quarter. Setting aside items related to its high-profile agreement to purchase Canadian Western Bank (CWB), the bank’s adjusted net income in Q3 was $960 million, up from $781 million one year earlier.
The bank stored away $149 million for potential loan losses during the quarter, a year-over-year increase of $38 million, with personal and commercial credit loss provisions accounting for the majority of that figure.
The results have provided a boost for Canada’s banking sector after Toronto-Dominion (TD) Bank missed analysts’ estimates and Bank of Montreal (BMO) and Scotiabank both saw profits dip in their third-quarter financial results.
RBC’s Q3 results arrive ahead of a planned split by the company of its Canadian business into separate reporting lines, and also offer a glimmer of good news for the bank amid a high-profile wrongful dismissal lawsuit filed by former chief financial officer Nadine Ahn, who was fired after allegations arose concerning an undisclosed personal relationship with a fellow RBC executive.
Canadian Imperial Bank of Commerce (CIBC) is set to close out the Big Six’s third-quarter earnings announcements tomorrow morning.
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