Feb 26 (Reuters) – Royal Bank of Canada beat analysts’ estimates for first-quarter profit on Thursday, supported by strength in its wealth management and personal banking segments.
Canadian lenders have leaned on fee-based, higher-margin businesses such as capital markets and wealth management as consumer and business confidence remains subdued amid lingering trade tensions with the U.S.
RBC has been pursuing growth in its wealth management segment by adding more advisers and scaling the business beyond its home market.
The unit reported a 32% jump in net income to C$1.3 billion ($950.22 million) during the first quarter, as it raked in higher fees from client assets.
Consumer spending has held up better than expected despite high interest rates and softness in the housing market.
Net income in personal banking at RBC, Canada’s largest bank, increased 17% to C$1.96 billion.
A recovery in M&A and IPO activity has also helped Canadian lenders, while volatile markets prompted portfolio reshuffling and boosted trading desks.
Net income in RBC’s capital markets segment rose 3% to C$1.48 billion, partially weighed down by higher compensation and an increase in provisions for credit losses. Expenses in the unit rose 4% from the year earlier.
The lender’s adjusted earnings per share came in at C$4.08 during the quarter, beating analysts’ average estimate of C$3.85, according to data compiled by LSEG.
($1 = 1.3681 Canadian dollars)
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Shilpi Majumdar)
