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Royal Bank of Canada boosted by lower provisions for bad loans

Last updated: 14:28 29 Nov 2017 GMT, First published: 09:28 29 Nov 2017 GMT

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RBC is accelerating its investments in digital services

Royal Bank of Canada (TSE:RY, NYSE:RY) beat expectations with record earnings for the financial year just ended.

Results were driven by strong earnings in Personal & Commercial Banking, Wealth Management, Capital Markets and Investor & Treasury Services, partially offset by lower earnings in Insurance.

Net income of C$11.47bn in the year ended 31 October was up 10% year-on-year.

Earnings per share rose 12% from the year before to C$7.56, helped by lower provision for credit losses.

The bank saw a 25% year-on-year increase in earnings in Wealth Management; an 11% rise in earnings in Personal & Commercial Banking; 21% earnings growth in Investor & Treasury Services and 11% growth in Capital Markets.

The Insurance division let the side down, with earnings down 19% on a year earlier.

As of October 31, 2017, the bank's Basel III Common Equity Tier 1 (CET1) ratio – a measurement of balance sheet strength - was 10.9%, up one-tenth of a percentage point from the prior year.

“We had a great year in 2017, with record earnings of $11.5 billion, driven by robust growth across our businesses and a disciplined approach to risk management. We also returned a record $8.2 billion of capital in dividends and share buybacks, demonstrating our ongoing commitment to shareholders while delivering on our growth strategies,” said Dave McKay, RBC president and chief executive officer.

“As we reimagine the role we play in our customers’ lives, we are accelerating our digital investments and finding new ways beyond traditional banking to add value to our clients, employees and communities,” he added.

RBC shares were up 0.7% at US$78.94 in pre-market trading in New York.

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