- Royal Bank of Canada (TSX:RY) posted record Q3 net income of C$5.4 billion, up 21 per cent year-over-year, driven by strong performance across all segments, especially Wealth Management and Personal Banking.
- National Bank of Canada (TSX:NA) also reported higher Q3 profits, with adjusted net income up 15 per cent, supported by growth in Wealth Management, Financial Markets, and the integration of Canadian Western Bank.
- Overall, Canada’s top banks showed resilience and growth, benefiting from lower loan-loss provisions, strong net interest income, and acquisitions
- Royal Bank of Canada stock (TSX:RY) last traded at C$190.39 and National Bank of Canada stock (TSX:NA) last traded at C$150.41
Canada’s top domestic lenders posted robust third-quarter earnings, underscoring the strength of the country’s banking sector despite lingering economic headwinds and global trade uncertainties. Leading the charge was Royal Bank of Canada (TSX:RY), which reported record net income of C$5.4 billion, a 21 per cent increase year-over-year, driven by strong performance across all business segments.
This content has been prepared as part of a partnership with Royal Bank of Canada and is intended for informational purposes only.
RBC’s adjusted net income rose to C$5.5 billion, with adjusted diluted EPS climbing 18 per cent to C$3.84. The bank’s return on equity (ROE) improved to 17.3 per cent, while its Common Equity Tier 1 (CET1) ratio remained solid at 13.2 per cent, reflecting a stable capital position.
CEO Dave McKay credited the results to RBC’s diversified business model and targeted investments in technology and talent. “We saw strong growth across each of our business segments reflecting the strength of our diversified business model, solid capital position, investments in technology and talent, and disciplined approach to risk and expense management,” he said in a news release, highlighting the bank’s ability to stay ahead of client expectations in a rapidly evolving economy.
Segment highlights
- Personal banking saw net income rise 22 per cent to C$1.94 billion, fueled by higher net interest income and volume growth in Canada. Synergies from the HSBC Canada acquisition also contributed.
- Commercial banking posted a modest 2 per cent increase in net income to C$836 million but surged 40 per cent quarter-over-quarter due to lower provisions for credit losses (PCL).
- Wealth management delivered C$1.1 billion in net income, up 15 per cent year-over-year, driven by market appreciation and net sales.
- Insurance income jumped 45 per cent to C$247 million, benefiting from improved life insurance claims experience.
- Capital markets earned C$1.33 billion, up 13 per cent, supported by strong performance in Global Markets and Corporate & Investment Banking.
Meanwhile, National Bank of Canada (TSX:NA) also reported solid results, with net income of C$1.065 billion, up 3 per cent from the same quarter last year. Adjusted net income rose 15 per cent to C$1.104 billion, reflecting strong contributions from all business segments and the successful integration of Canadian Western Bank (CWB).
National Bank’s Personal and Commercial Banking segment grew 5 per cent in adjusted net income, while Wealth Management rose 12 per cent, and Financial Markets increased 5 per cent. The bank’s CET1 ratio improved to 13.9 per cent, and it announced plans to repurchase up to 8 million common shares.
Sector-wide strength
Across Canada’s Big Six banks, combined net income for the quarter reached C$14.69 billion, up from C$12.1 billion a year earlier. The sector benefited from easing trade tensions and falling interest rates, which helped reduce loan-loss provisions and support mortgage performance.
Dividend increases were also notable, with RBC and National Bank each raising payouts by 4 per cent, reflecting confidence in future earnings. Analysts expect continued strength in net interest income and capital markets, though caution remains around geopolitical risks and the pace of economic recovery. Scotiabank (TSX:BNS) and Bank of Montreal (TSX:BMO) also posted strong Q3 financial results this week in the face of easing trade tensions.
Royal Bank of Canada is one of the largest banks in the world, based on market capitalization, and has a diversified business model. Its segments include personal and commercial banking, wealth management, insurance and capital markets.
Royal Bank of Canada stock (TSX:RY) last traded at C$190.39 and has risen 9.85 per cent since the year began.
National Bank of Canada stock (TSX:NA) last traded at C$150.41 and is up 14.78 per cent since the beginning of the year.
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