12/03/2014 06:37 EST | Updated 02/02/2015 05:59 EST

RBC's Q4 Profit Soars To $2.33 Billion As Canadian Arm Sees Record Profit


TORONTO - Strong performance at RBC's Canadian operations helped the country's largest bank increase its fourth-quarter profit to $2.33 billion, up 11 per cent from a year earlier.

Royal Bank of Canada's net income amounted to $1.57 per common share, up 18 cents from a year earlier.

On an adjusted basis, it earned $1.59 per diluted share, which was a cent above the average estimate compiled by Thomson Reuters.

Total revenue for the three months ended Oct. 31 was $8.38 billion, up $463 million or 5.8 per cent from a year earler, while return on equity increased to 19 per cent from 18.8 per cent.

On average, analysts were expecting adjusted earnings per share of $1.58 and $8.40 billion of revenue during the quarter.

"We delivered another strong quarter of earnings growth, demonstrating the strength of our retail businesses and capital position, as well as our continued focus on efficiency management activities, said Dave McKay, who became RBC's president and chief executive in August with the retirement of Gord Nixon.

Royal Bank (TSX:RY) said its Canadian banking arm had record-high net income of $1.21 billion in the quarter ended Oct. 31, up $123 million from a year earlier, with revenue rising to $3.34 billion from $3.11 billion.

RBC's Canadian personal and commercial banking arm benefited from higher fee-based revenue, more volume and $40 million of accounting adjustments recognized in the quarter.

RBC Capital Markets was one of the few weak spots during the quarter, with net income falling 14 per cent to $402 million as a result of lower trading revenue.

For the full 2014 financial year ended Oct. 31, Royal Bank had $9 billion of net income, up eight per cent from $8.34 billion in fiscal 2013. Diluted earnings rose 51 cents to $6 per common share, while return on common equity fell to 19 per cent from 19.7 per cent. Revenue increased by $3.4 billion or 11 per cent to $34.1 billion.

Last month, Royal Bank announced plans to exit its wealth management business in the Caribbean. The company also sold its Jamaican operations at a loss earlier this year.

The bank said the moves would allow it to focus on serving high net worth and ultra-high net work clients in several key areas such as Canada, the U.S., Asia and the British Isles.

The Wealth management segment had $285 million of net income in the fourth quarter, up $83 million or 41 per cent compared with last year, despite $18 million of after-tax restructuring costs related to its U.S. and international wealth management businesses.

For the full year, RBC recognized a $100-million loss related to the sale of RBC Jamaica plus $32 milion after-tax provisions for post-employment benefits and restructuring charges in the Caribbean.

The company said last month that its European RBC Suisse business will undergo a strategic review.

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