RBC’s year-over-year profits drop in Q1

Earnings results continue to roll out from the Big Six

RBC’s year-over-year profits drop in Q1

Royal Bank of Canada reported net income of $3.2 billion for the first quarter of 2023, down 22% on a yearly basis as the company became the latest of Canada’s banking giants to set aside higher provisions for credit losses in Q1.

The bank saw its diluted earnings per share fall 19% for the quarter ending January 31, from $2.84 in Q1 2022 to $2.29 this time around, although its adjusted earnings per share rose to $3.05 compared with $2.87.

It set aside $532 million for credit losses, mainly in personal and commercial banking, an increase from $105 million at the same time last year.

Net income in the personal and commercial banking division grew by 8% ($152 million) over the same time last year, a result the bank said was due to larger interest income thanks to higher interest rates and average volume growth of 9% in loans.

On the wealth management side, net income edged up 3% to $848 million, while its capital markets division saw an increase of $101 million – a 9% spike compared with Q1 2022.

 RBC president and CEO Dave McKay said in remarks accompanying the results that the bank was “prudently managing risk while delivering strong revenue growth” in the current economic climate.