Royal Bank of Canada surpassed analyst forecasts for first-quarter profit, supported by robust results in its wealth management and personal banking operations. The bank has leaned into fee-based, higher-margin businesses as broader consumer and business confidence remains muted amid continuing trade tensions with the U.S.
RBC has been expanding its wealth management arm by recruiting additional advisers and extending the business beyond its home market. That strategy helped the unit record a 32% increase in net income to C$1.3 billion during the first quarter, as the bank collected higher fees tied to client assets.
Personal banking at Canada's largest bank also strengthened, with net income rising 17% to C$1.96 billion in the quarter. Consumer spending has remained more resilient than many anticipated despite high interest rates and ongoing softness in the housing market, supporting retail deposit and lending activity.
Growth in corporate finance activity also provided assistance to the sector. A recovery in mergers and acquisitions and in initial public offering activity has been helpful to Canadian lenders. At the same time, volatile market conditions prompted clients to rebalance portfolios, which in turn supported trading desks.
RBC's capital markets segment posted a 3% rise in net income to C$1.48 billion. The business's performance was partially constrained by higher compensation costs and an increase in provisions for credit losses. Expenses in the unit increased 4% compared with the prior year.
On a per-share basis, the lender reported adjusted earnings of C$4.08 for the quarter, beating the analysts' average estimate of C$3.85 compiled by LSEG. The exchange rate referenced in the report is $1 = 1.3681 Canadian dollars.
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